Pascua Lama

Pascua-Lama is an open pit mining project of gold, silver, copper and other minerals. Pascua Lama is located in the Andes mountains, in the southern reaches of Atacama Desert, straddling the border between Chile and Argentina at an altitude of over 4,500 metres. Toronto-based Barrick Gold, the world's largest gold mining company, is developing the project. Due to its proximity to glaciers, Pascua-Lama has caused controversy and public protest in Chile, including demonstrations and petitions presented to the Chilean government. However, Chile and Argentina have both approved the project, following controversial yet thorough environmental reviews in both countries.

Pascua-Lama contains estimated deposits of 17 million ounces of gold and 635 million ounces of silver, with 75 percent of the deposits in Chile and 25 percent in Argentina.

Legal background

The title to the Pascua Project mining claims, or mensuras, has been the subject of a long-running Court action (Action No. C-1912-2001) in Chile found on the Court's website, initiated in 2001 by a professional mining agent, one Mr. Villar, against Barrick's Pascua project Company, Minera Nevada SA. In 2006, the Court ruled that the contract whereby Barrick obtained title to the Pascua claims was null and void, and the Pascua claims were ordered resurrected and returned to their original owner. The original owner is Villar's principal. In 2007, however, the Court of Appeal ordered the 2006 lower Court decision to be re-written exactly as it was originally written (the "new decision" Barrick referenced in their Press Release), and then re-delivered properly to Barrick as required by the Chilean Constitution. Contemporaneously, Barrick commenced a "parallel" Court action against the Judge that issued the original 2006 decision against Barrick, claiming, inter alia, that the Judge lacked the competence to issue the 2006 decision. The parallel case was resolved quickly, however, and on November 28, 2008 the Supreme Court of Chile ruled that the Judge's decision was proper and the remedy sought by Barrick was denied. The Court did Order, however, that the Clerk of the Court who originally failed to ensure the Constitutionally-proper delivery of the original 2006 Judgment be suspended and an investigation initiated into the circumstances surrounding the Clerk's apparent errors.
About two weeks later, just before the end of 2008, Peter Munk, Barrick's Chairman, sold one million of his shares in Barrick Gold Corporation.
The Court case is now moving to a final conclusion at the Supreme Court level in Santiago's 14th District Court. [Chile is a "Napoleonic Code" jurisdiction, similar to France and Quebec, and its system of law varies from that in England, Canada and the United States ("Common law" jurisdictions). Accordingly, its Court procedure is considerably different than that of Common law jurisdictions.]

The project formerly became possible with the adoption by Chile and Argentina of the Mining Integration and Complementation Treaty, signed by the presidents of Chile and Argentina in 1997 and ratified by their legislatures in 2000. This treaty permits investors to explore and exploit mineral deposits that straddle the border between the two countries. In 2000, an appeal was filed with the Chilean Constitutional Court to rule the treaty unconstitutional. Alcayaga, Luna, and Padilla, analyzing the treaty, have concluded that, "both in terms of content and form, [it] contains provisions that violate Chile's constitution". Nevertheless, nothing came of the lawsuit, and Chile's National Environmental Commission (CONAMA) issued its final approval for the Pascua Lama project on 13 June 2006.

History of the project

The mining project is organized by the Barrick Gold corporation, which plans to invest US$1.5 billion over 20 years in it and projects an annual output of 750,000 ounces of gold and 30 million ounces of silver in the first five years.

Barrick has been planning the project for several years. It performed its first studies of the glaciers in 1991, purchased the Chañarcillo estate at the location via an affiliate (Empresa Nevada) in 1997, and published an environmental impact report in 2000, which was approved by COREMA, the regional environment authority, in 2001.

Satellite view of the project area showing the Pascua-Lama open pit in red

Barrick's plans for the project have changed over time. In June 2005, Barrick intended to commence building in January 2006, after responding to a questionnaire put to it by CONAMA, Chile's National Environmental Commission. In November 2005, however, the company published a report stating that it had scrapped its original plans, presented in December 2004, for "transplanting" three glaciers in order to gain access to the deposits beneath them, moving them to another glacier with which they were to bond. This change was publicly supported by Fernando González, the chairman of the council of Huasco Valley farmers.

As of September 2008, the construction hasn't begun yet.

Environmental consequences controversy

Those protesting the project contend that it will involve the removal of 20 hectares of ice, a volume of 300,000 to 800,000 cubic metres, and that this will cause serious environmental harm. Nevertheless, the EIA and IIA approvals in both Chile and Argentina specifically preclude this from happening, and Barrick has confirmed it has no plans to move any ice or glaciers. To do so would be a violation of the permits granted by the relevant authorities. Opponents also contend that the project will affect the water supply of the 70,000 farmers in the Huasco valley, releasing cyanide, sulfuric acid (vitriol) and mercury into the valley's rivers, that the company has bought the support of the farmers with "social assistance" and promises of US$60 million for infrastructure work, and that the Mining Integration and Complementation Treaty was adopted under pressure from Barrick. In November 2005, a petition of 18,000 signatures was presented to the Chilean government by the Anti Pascua Lama Front, a coalition of environmentalist groups.

The original scope of the ore body lay partially under two small glaciers which eventually feed into the rivers of the Huasco Province. Environmental reviews took place over more than two years and government authorities imposed 400 conditions on the company in order to mine. As a consequence, more than one million ounces of gold at the site will not be mined. However controversy is still rampant as to the real environmental impact, as mine exploration has already been linked to a 56 to 70 % depletion in the three glaciers nearest to the mine site.^{[citation needed]}

Extensive water management infrastructure is incorporated into the mine design to mitigate the effects of surface and sub-surface water migration across the operation.^{[citation needed]}

The historical record of these types of projects in Chile and the companies' real-world ability to meet legal environmental constraints makes the processing of residual-waste a point of contention. The inability or unwillingness of local authorities to stand up to spills and breaches of environmental requirements is well known and another key point of disagreement with opponents to the project.^{[citation needed]}

The recent approval (as of 2000-2009, during the Lagos and Bachelet presidencies ) of many controversial projects such as large mines, dams for power generation, huge salmon farms, forestry, etc. in spite of many legal and environmental concerns, again question the ability or willingness of the Chilean Government to address local communities concerns' when clashing with large corporations and perceived economic benefits .

These issues have recently even been criticized by the OECD as major impediments for Chile being able to join the 'elite club' of developed countries.

Barrick Gold contends that the project is environmentally friendly in terms of water treatment, and that the project will create 5,500 direct jobs during the mine's construction phase. It contends that underground mining methods are not economically feasible for the mine, only open pit methods. It states that its US$1.5 billion investment "would be directly invested in the Huasco province in Chile and San Juan province in Argentina", that it has "identified more than 600 potential suppliers from Chile’s Region III" in pursuance of its policy of sourcing local goods and services, and that "sustainable development projects have been and will continue to be a priority for funding to the tune of millions of dollars focused in the areas of education, health, infrastructure and agricultural improvement".

Electronic mail chain letter

This project was in 2006 the subject of an online petition, circulating as a chain letter by electronic mail, imploring the Chilean government to prevent the project from obtaining authorization because of the environmental and social consequences of the mining operation. According to analysis by Snopes, the main point of the petition was valid, but it did contain some misleading passages. Barrick published a response countering many of the statements made in the chain letter.

Further reading

• Stephen Leahy (2006-01-30). "Canadian company gives it all for glacier mining site". Straight Goods. http://www.straightgoods.ca/ViewFeature6.cfm?Ref=68. 
• Barrick Gold Corp. to Stop Killing Glaciers
• Kronenberg, D. (2009). "Global warming, glaciers and gold mining." ESEE 2009, 8th International Conference of the European Society for Ecological Economics; Transformation, Innovation and Adaptation for Sustainability, 29th June - 2nd July, Ljubljana, Slovenia pdf

External links

• "Barrick Pascua-Lama Shareholder Report - Final Report". Environmental Resources Management. Barrick Gold Corporation. 2006-11-30. http://www.barrick.com/Theme/Barrick/files/docs_ehss/ERM%20Report%20on%20Barrick%20Pascua-Lama.pdf. 
• "Campaign against Barrick Gold's Pascua Lama project". Pascua Lama Project. MiningWatch Canada. 2006-06-01. http://www.miningwatch.ca/index.php?/chile_en/pascua_lama_action. 
• Gabriela Puig. "Say "No" to the project "Pascua-Lama".". Care2Care. http://www.thepetitionsite.com/takeaction/946839131.  — an electronic petition