SANTIAGO, July 2 (Reuters) - A Chilean court will rule this month on an attempt by indigenous groups to halt development of Barrick Gold Corp’s $8.5 billion Pascua-Lama gold mine, work on which is already suspended, local media reported on Tuesday.
The Copiapo court of appeals temporarily halted construction of Pascua-Lama, which straddles the Chile-Argentine border high in the Andes Mountains, in April to weigh claims by the indigenous communities that the project has damaged pristine glaciers and harmed water supplies.
The court must now decide whether to rule in favor of the indigenous groups, which could lead to an indefinite suspension of the controversial project.
“The decision will have to be issued during the month of July in any case,” Judge Antonio Ulloa said in an interview published by the northern Chilean newspaper El Diario de Atacama.
To be sure, analysts say whoever loses is likely to appeal to Chile’s Supreme Court, suggesting Toronto-based Barrick faces a protracted legal battle in world No. 1 copper producer Chile.
In addition to the court-ordered suspension, Chile’s environmental regulator has ordered a halt to work at the mine, citing violations, and said Barrick, the world’s biggest gold miner, must come up with a water management system that meets the requirements of its permits before restarting development.
The regulator told Reuters that the earliest the project could be reactivated is likely in one to two years.
Barrick said late on Friday that it would re-sequence construction of the project to target a start of production by mid-2016, deferring some $1.5 billion to $1.8 billion of planned capital spending in 2013 and 2014.
While Pascua-Lama is one of the richest untapped gold deposits in the world, a string of delays and budget overruns has made it a nightmare for Barrick and its investors.
Investors are keenly watching what happens to the project, the latest mega-mine to face setbacks in Chile due to growing opposition from environmental, indigenous and social groups.
Many in the Andean country feel the mining boom has not benefited them, and has instead curtailed water supplies in the arid north, and harmed the environment.
Pascua-Lama is one of the most unpopular mining endeavors in Chile. Many opponents are incensed that it has produced environmental harm and are particularly worried about the project’s effects on glaciers. (Reporting by Fabian Cambero and Alexandra Ulmer; Editing by Peter Galloway)