Argentina lifts curbs on cyanide use at Barrick's Veladero mine

Restrictions were imposed following a leak from a pipeline in March.

Authorities in the Argentine province of San Juan lifted restrictions on leaching operations at Barrick Gold's (TSX, NYSE:ABX) Veladero mine on Thursday, which will allow the company to resume full operations.

Judge Pablo Oritja, who is overseeing the case, told local paper Clarín (in Spanish) there was no reason to keep the restrictions in place as Barrick had completed all required work, following its third cyanide spill in less than 18 months.

The world's biggest gold producer, however, said it would not immediately resume full operations. Instead, it plans to gradually add cyanide to Veladero’s heap leach facility until it has completed the ramp up of the new system and verified that all elements are ready for normal operations.

Barrick plans to gradually add cyanide to Veladero’s heap leach facility until it has completed the ramp up of the new system.

In April, Barrick lowered its output estimate for Veladero and increased forecast production costs. Barely a month later, the operation was hit by a 35-hour strike over better working conditions.

The labour action was the latest of a string of incidents affecting the regular operation of the mine in the past year and a half.

In January 2016, the Toronto-based miner had to pay a 145.7m pesos fine (about $9.8m at the time) over a cyanide spill at the same mine.

When Barrick announced such fine, it said it had undertaken a plan to strengthen controls and safeguards at the mine, including increased water monitoring.

A few months later, however, falling ice damaged a pipe carrying process solution in the leach pad area, causing a second leak. Normal operations only resumed more than a month later, in October.

The third cyanide spill happened in March this year and while remedial works were done promptly, Barrick has been unable to bring Veladero back to normal operations just yet.

To make things worse, the company may soon face “negligence” charges over the latest spill, as it allegedly missed deadlines on three orders from provincial authorities, including replacing the pipes that decoupled in March. The case may end with Barrick paying a new fine, fresh restrictions over operations at Veladero, or both.

The Canadian miner sold in April a 50% interest in Veladero, one Argentina’s largest gold mines, to China’s Shandong Gold Group in a transaction worth $960 million.

The mine produced 544,000 ounces last year and has proven and probable mineral reserves estimated in 6.7 million ounces of gold as of December 31, 2016, according to the company's website.