Chile President Sebastian Pinera has criticised the environmental assessment process that led to the granting of a permit to Barrick Gold's flagship Pascua-Lama mine project.
In April, following complaints from local communities over damage to glaciers and pollution of water supplies, the Chilean court suspended development work at the $8.5bn mine, reports Reuters.
Last month, the country's environmental regulator slapped a fine of nearly $16m on Barrick, the world's largest gold miner.
When the company was given the environmental license, Pascua-Lama had made a commitment to construct enough infrastructure facilities to manage and treat water before launching its pre-stripping operations.
However, the firm only partially implemented this commitment before commencing pre-stripping operations, according to the regulator.
The regulator also alleged that the defective water canals had led to a rockslide in January that negatively impacted 1,500m2 of meadows.
Early this month, the regulator ordered Pascua-Lama to submit water management plans in order to commence work.
Barrick Gold chief financial officer Ammar Al-Joundi told the news agency that the company will soon submit the water management plan to avoid pollution of water supplies.
"Once we have that, then we will be able to take a look at the overall project, take a look at the impact on scheduling and costs and everything else," Al-Joundi added.
Pascua-Lama mine is an open-pit mining project located in the Andes Mountains, on the Chilean-Argentine border.
The project has reserves of gold, silver, copper and other minerals and is expected to produce 800,000 to 850,000oz of gold and 35 million oz of silver a year in its first five years.
The firm has already spent $5bn on project development and environmental hurdles are likely to delay the start of operations beyond 2014.
Image: Pascua-Lama is an open-pit mining project located in the Andes Mountains, on the Chilean-Argentine border. Photo: Earthsound.