Work on Barrick's Pascua Lama mine suspended due safety-report

Sat Nov 10, 2012 11:45am EST

* Inspectors say dust levels may pose health risk

* Gold mine project has suffered numerous setbacks

SANTIAGO Nov 10 (Reuters) - A Chilean state agency has temporarily halted construction work at Barrick Gold Corp's Pascua Lama mine citing concerns about the health of workers at the site high in the Andes, a newspaper reported on Saturday.

Following a recent visit to the gold mine project, safety inspectors from the Mining Ministry's Sernageomin geology unit said excessive levels of dust might pose a risk to workers.

"This affects the safety of the mining operation," the agency said, according to a document quoted by the La Tercera newspaper. It said officials had ordered a series of studies be conducted before work could resume.

The newspaper quoted Barrick, the world's biggest gold producer, as saying it offered to call off work before the government agency ordered the suspension.

It is the latest in a series of setbacks at Pascua Lama, which lies on the border between Chile and Argentina.

Earlier this month, Barrick again raised its cost estimate for building the mine to between $8 billion and $8.5 billion from an earlier budget of $7.5 billion to $8 billion. It also pushed back the date when production at the project will begin.

The company blamed the increase on delays and higher labor and project-management costs.