MAC/20: Mines and Communities

Chile's Pascua Lama battle may finally be nearing its end

Published by MAC on 2019-10-13
Source: mining.com

Workers and shareholders of Barrick Goldhave now won permission for a class action suit against the company, which could increase the Canadian company's lialibities by a massive $3 billion [see: Chile orders Pascua Lama be shut ].

Would this mark the end of the "Pascua Lama" affair - one of the most notorious and hard-fought community environmental and land rights battles of the past decade?

Canadian court approves $3bn securities class action against Barrick Gold

Cecilia Jamasmie

mining.com

11 October 2019

A Canadian court has given the go-ahead for a pension fund’s proposed $3
billion securities class action against Barrick Gold (TSX:ABX)
(NYSE:GOLD), the world’s second largest bullion miner, for alleged
misrepresentations in its environmental disclosures about the stalled
Pascua Lama gold-copper mine straddling the Chile-Argentina border.

The suit, approved by the Ontario Superior Court of Justice, claims that
Barrick gave a false account of the potential impacts of the
multi-billion-dollar project at the time it was being built, in an
environmentally sensitive area of the Andes mountain range.

The ruling, which only refers to information published in Barrick’s
second quarter 2012 report, shows that Local 675 pension’s trustees are
suing the Toronto-based miner over various disclosures it made about the
project, which was ultimately abandoned, resulting in billions worth of
shareholder losses.

Pascua-Lama has been shuttered since 2013, when a Chilean court ordered
the company to halt construction over environmental concerns. Later that
year, Barrick shelved the project, citing massive cost overruns and
nose-diving metal prices.

The original plan for the mine, which required a capital outlay of more
than $8 billion, contemplated an open-pit operation that would have had
an effect on three small glaciers in the Chilean side of the Andes. It
also involved major construction in the area and huge waste dumps.

In 2016, Barrick began a “drastic revision” of the project and agreed to
pay $140 million to resolve a US class-action lawsuit that accused it of
distorting facts related to the controversial project.

Shortly after, Barrick abandoned the idea of an open pit at the site,
saying it planned to mine underground instead.

In April 2017, it sold a 50% stake in its Veladero mine in Argentina to
Shandong Gold Group in a transaction worth $960 million. As part of that
deal, which made the two firms strategic partners, the Shandong
province-based gold miner committed to help Barrick move forward with
Pascua Lama.

Later that same year, the company agreed to pay a further $20 million to
a Chilean group in order to settle an arbitration case against the
company, filed last year after the gold producer halted payments settled
in 2005.

Argentina has been an enthusiastic supporter of the project – while only
around a fifth of the deposit is located in that country, many of the
above-ground facilities will be built on that side of the border.

If it ever comes into production, Pascua-Lama would generate about
800,000 to 850,000 ounces of gold and 35 million ounces of silver per
year in the first full five years of its 25-year life.

 

 

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