Barrick Gold to restart suspended Pascua Lama project in Chile

21 May 2014 (Last Updated May 21st, 2014 18:30)

Toronto-based Barrick Gold recently met with officials of the Chilean mining industry to discuss the re-opening of its Pascua Lama project in Chile, South America.

Toronto-based Barrick Gold recently met with officials of the Chilean mining industry to discuss the re-opening of its Pascua Lama project in Chile, South America.

Construction work had started in 2006 but was stopped in October 2013 as part of Barrick's debt-reduction programme, as well as resistance from local communities and environmental groups.

Additionally, the project has experienced many technical and political challenges and suffered setbacks from the Chilean courts due to its water use and impact on glaciers in the vicinity.

"They've showed us their interest in solving [Pascua-Lama's] problems and doing community work, which to us appears correct."

Pascua Lama's major problems have been overcome, including political opposition, environmental permitting, labour unrest, cost overruns and bullion prices, and Barrick is now interested in restarting the project.

Speaking to Reuters, the newly appointed Chile Mines Minister Aurora Williams said that the company wanted to resolve outstanding problems so it could continue with Pascua-Lama, which straddles the Chilean and Argentine border.

"They've showed us their interest in solving [Pascua-Lama's] problems and doing community work, which to us appears correct...What I understand is that there's interest that the project continue," Williams said.

If the mine reaches the production stage, it is expected to produce around 800,000oz to 850,000oz of gold and 35 million ounces of silver in the first five years of its 25 year life.

Barrick has already spent $5bn on Pascua Lama and the final expenditure could amount to more than $8.5bn. The company will spend $300m this year on putting the project in to a dormant state.

Energy