Oct 31 Barrick Gold Corp said on
Thursday it will halt development of its Pascua-Lama mine in
South America indefinitely - a surprise reversal on a project
that has already cost the world's largest gold miner more than
Pascua-Lama, which the company had been counting on to
provide a large share of its future gold production, has been
plagued by political opposition, permitting issues, labor
unrest, cost overruns and a sharp drop in bullion prices.
Here is a timeline of key developments at Pascua-Lama over
the past 16 years:
September 1996 - Barrick, stepping up Argentine prospecting,
considers a developing gold mine straddling Argentina's border
with Chile, high in the Andes Mountains. One of Barrick's chief
targets is the Lama prospect, inside Argentina, just across the
border from its Pascua project in Chile.
December 2000 - Barrick says it will delay the start of
full-scale construction on the Pascua-Lama project due to
depressed gold and silver prices. The capital cost of the
project is pegged at $1.2 billion. Previously, Barrick had said
it expected Pascua-Lama to contribute a full-year's production
of 800,000 ounces of gold in 2003.
July 2004 - Barrick says it is proceeding with the
development of Pascua-Lama despite uncertainty about a planned
new mining tax in Chile. It says it will be seeking permits and
finalizing fiscal and tax matters over the next 18 months and
then begin a three-year construction schedule. The mine is
expected to cost between $1.4 billion and $1.5 billion to build.
June 2006 - Chilean environmental authorities approve the
Pascua-Lama project despite the opposition of environmental
groups concerned about water pollution. The mine's capital cost
is still pegged at $1.5 billion.
December 2006 - Pascua-Lama gets environmental approval from
May 2009 - Barrick gives the long-awaited final green light
to Pascua-Lama after Chile and Argentina settle a dispute over
how the project will be taxed. The company estimates
construction costs at $2.8 billion to $3.0 billion.
July 2011 - Barrick raises its forecast for capital
expenditures at Pascua-Lama by about 40 percent to between $4.7
billion and $5 billion. The company blames rising costs on
higher labor, material and energy costs.
July 2012 - Barrick says the cost of building Pascua-Lama
will be much higher than expected, 50 to 60 percent above the
top end of its earlier estimate. The new price tag could be
between $7.5 billion and $8.0 billion, but a full review is not
Barrick blames the higher costs on the decision to manage
construction in-house rather than hiring an outside contractor,
a move that had been meant to keep costs down.
November 2012 - Barrick nudges back the production date for
Pascua-Lama to the second half of 2014 from its previous target
of mid 2014, and increases its cost estimate to between $8
billion and $8.5 billion from an earlier estimate of $7.5
billion to $8 billion due to construction delays and higher
labor and project-management costs.
April 2013 - Barrick halts construction at Pascua-Lama
after a local court orders development be suspended while it
weighs indigenous communities' claims that the project was
destroying nearby glaciers and harming their water supply.
May 2013 - Chilean authorities order Barrick to halt
construction at Pascua-Lama and fine the company $16 million,
citing serious environmental violations.
July 2013 - A Chilean appeals court suspends the
construction of Pascua-Lama until Barrick builds infrastructure
to prevent water pollution, and orders the mine's environmental
permit be reviewed.
October 2013 - Analysts and shareholders expect Barrick
will likely raise the cost estimate for Pascua-Lama, possibly to
between $9 billion or $10 billion, when it reports third-quarter
results. But there are also market concerns that the total
capital cost estimate could be well in excess of $10 billion.
Instead Barrick says it will halt development indefinitely.