The Pascua Lama gold mine in the Chilean Andes may not be built. Last week, a Chilean court finally confirmed the discontinuation of the controversial project by the Canadian mining company Barrick Gold. In addition, the company has to pay a fine of 7.6 million euros for the development work that has already started. Barrick announced that the verdict was accepted but did not want to give up the open pit project.
Pascua Lama is located in the border region of Chile and Argentina at an altitude between 4000 and 5000 meters. The gold deposits are located in an ecologically sensitive area and glaciers. 80 percent of the mine area is located in the Atacama region of Chile and 20 percent in the Argentine western province of San Juan. According to the mining company, 17.8 million ounces of gold are to be stored here – it would be one of the largest as yet unexploited deposits in the world. Barrick wanted to invest billions of dollars in the development and began building the infrastructure in 2009.
A long legal tug-of-war followed. In 2013 the Supreme Court upheld a temporary construction freeze imposed by the environmental agency. This decreed permanent termination in 2018. The agency had found the mining company to have over 30 violations of environmental regulations, including damage to the glaciers and the discharge of acidic sewage into a nearby river. Barrick appealed against this. This has now been finally rejected: “The extent of the risk of damage to people’s health makes it necessary to discontinue the Pascua Lama project, since other alternatives for safe operation for the environment and the health of the population do not appear to be feasible,” the judges explained to her Judgment.
The current decision was received with great joy and relief in the local communities. “20 years had to pass, three generations were affected, irreparable damage has occurred,” says a statement by the “Assembly for the Water of the Guasco Alto”. “Our great joy comes from the fact that we have succeeded in saving our territory from certain death that the Pascua Lama project would have meant.”
For Lucio Cuenca from the Latin American Observatory for Environmental Conflicts (Olca), the judgment is “historic and the most important decision of the new environmental legislation to date”. It is undoubtedly thanks to the tireless struggle of the local communities and will certainly stop other mining companies with similar projects, said the expert from the Chilean non-governmental organization. Nevertheless, his euphoria is limited: “The damage to glaciers, wetlands and the entire ecosystem is irreparable,” said Cuenca. The fine with which the renovation is to be financed does not change anything.
The mining industry is still Chile’s most important source of foreign currency. The main export product is copper; the narrow country along the Andes is the world’s largest producer of the metal, which is in great demand. But even Chile’s mining minister Baldo Prokurica showed that the industry had to adapt to environmental standards. “The companies that do not comply with these will no longer be able to carry out their projects,” said the minister after the verdict was announced.
The reaction in Argentina was completely different. For the local mining state secretary Alberto Hensel, the company has two options after the judgment: Barrick Gold could work out a “reformulation of the project with a new environmental impact statement” because the Chilean courts did not question the concession for the open pit mine per se. Or the Canadian company is concentrating entirely on the Argentine part of the mine, even if the exploitation is considered to be far less lucrative, according to Hensel.
Barrick immediately took up the template from Argentina. “Pascua Lama remains an important project,” explained the responsible manager Marcelo Álvarez. The company will now »thoroughly review the technical, economic, social and environmental aspects and work on a different approach to the approval and development process«. Every new project development should “comply with the applicable laws in Chile and Argentina,” Álvarez said.