Chilean court agrees to study new appeal against Pascua-Lama

SANTIAGO Fri Oct 11, 2013 8:58pm EDT

SANTIAGO (Reuters) - A Chilean appeals court has agreed to examine a new appeal against Barrick Gold Corp's (ABX.TO) suspended Pascua-Lama gold mine that alleges the project is hurting the environment and the quality of life for the local population.

The country's Supreme Court and environmental regulator have already frozen construction of the mine because of "significant environmental harm." The suspension is poised to be lifted once a water management system is complete.

But the new appeal charges that the mine engaged in "illegal and arbitrary acts," referring to the "installation, execution and realization of works and activities ... that were not authorized by the environmental regulator (SMA)."

The legal action, presented by lawyer Barbara Salinas, seeks a new freeze on Pascua-Lama.

The local Antofagasta Court of Appeals will study the appeal, a spokesman for Chile's court system said on Friday. It was not yet clear when it might issue a decision or how it might rule.

Salinas told Reuters it was tricky to predict when a ruling might be issued but that she expected it "as soon as possible."

Toronto-based Barrick declined to comment.

The latest action against the $8.5 billion project, originally forecast to produce 800,000 to 850,000 ounces of gold a year, came just weeks after the Supreme Court rejected a move to strike down the mine's environmental permit.

A group of indigenous Chileans had asked the top court to rescind Barrick's license, arguing that environmental damage from the mine, which straddles the Chilean and Argentine border, warranted a re-evaluation of the project.

Pascua-Lama's supporters say its environmental impact will be limited and that the massive mine will provide employment and help boost copper powerhouse Chile's mining-dependent economy.

Environmental and social groups counter that the mega-mining project will damage pristine glaciers, strain and pollute the water supply and harm agricultural activity in the area.

Barrick has stopped construction on the project and submitted a plan for water management infrastructure to the SMA. The miner said in June that Pascua-Lama, on which it has already spent $5.4 billion, had been delayed until mid-2016.

(Reporting by Fabian Cambero and Alexandra Ulmer in Santiago; Additional reporting by Allison Martell in Toronto; Writing by Alexandra Ulmer; Editing by Alden Bentley and Peter Cooney)

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