(Adds comments from Barrick, mining minister, writes through)
By Fabian Cambero
SANTIAGO May 28 Canadian miner Barrick Gold
has come to an initial agreement with local indigenous
peoples in Chile who have opposed its stalled Pascua-Lama mine,
taking a first step on what my be a long road to reactivating
Barrick, the world's largest gold miner, halted the gold and
copper project on the Chilean and Argentine border last year
after investing $5 billion in it.
Pascua-Lama, which Barrick had been counting on to provide a
large share of its future gold production, has been plagued by
permitting issues, cost overruns and a sharp drop in bullion
prices, as well as the strong and organized opposition of the
local Diaguita indigenous communities.
The new memorandum of understanding between 15 of the 18
communities and Barrick is an initial step towards bringing the
two sides together, Lorenzo Soto, the lawyer for the Diaguita,
told Reuters on Wednesday.
"A new phase in the way that large-scale mining is done in
Chile has begun," said Soto, who is known for representing
indigenous communities in cases against mining projects,
including Goldcorp's El Morro mine, located near
Barrick's office in Chile said in a statement that the new
initiative leaves behind the "sourness" of the past.
"Although Pascua-Lama is suspended today, our aim is to
obtain the permits to restart construction," Barrick said. The
company recently met with the Chilean mining minister to express
its interest in continuing with the project, the minister told
Reuters last week.
Barrick's agreement with the indigenous peoples will last
six months, during which the company will provide project
details to the communities to allow corroboration by experts, a
process that will be funded by the Toronto-based miner, Soto
Should that process be successful, Barrick will enter a
dialogue phase that could last two years or more, he said,
adding that the company would not restart construction until it
That phase may include the payment of an "indigenous
royalty". Although no legislation for such a mechanism exists
"there is nothing to stop it being created," Soto said.
However, Chile's mining minister, Aurora Williams, said she
did not believe that such a payment would be the way forward.
"In practice, that's paying to resolve the situation and we
think that dialogue is what is needed," she told reporters on
The Diaguita agreement is an "incrementally positive" step,
said Josh Wolfson, a gold and precious metals analyst at Dundee
Capital Markets in Toronto.
"This is not the catalyst for the company to go and start
construction," said Wolfson, adding that Barrick still must
negotiate with communities and governments, figure out
financing, and determine whether the project is worthwhile at
current metals prices.
Barrick shares closed down 1 percent at C$17 on the Toronto
Stock Exchange on Wednesday, in line with the movement of other
gold mining shares.
(Additional reporting by Nicole Mordant in Vancouver, Writing
by Rosalba O'Brien; Editing by Chizu Nomiyama, Paul Simao and