Litigious popular opposition casts doubt upon billions in Chilean mining projects

Popular opposition from litigious activist groups in Chile is putting billions of dollars in mining projects at risk.

Reuters reports that local indigenous groups have achieved increasing success in the use of the legal system to thwart major mining projects in the copper-rich Andean nation.

In April a key permit for Goldcorp Inc's (TSX:G) USD$3.9 billion gold and copper El Morro Project was annulled due to failure to engage in proper consultation with local communities.

Grassroots opposition often arises over the environmental impact of mining projects, with farmers especially fearful of how large-scale resource extraction will affect water supplies and crop quality.

Concerned that their own Collahuasi copper project will suffer the same fate as Goldcorp's, American Plc (LSX:AAL) and Xstrata Plc (LSX:XTA) have already delayed the submission of environmental impact studies in order to ameliorate relations with local communities.

Although these developments are a step in the right direction for the environment as well as the rights and welfare of local indigenous communities, critics contend that the lawsuits are the result of failure by the government to implement proper regulation, and express concern that such regulatory failure will imperil billions of dollars in mining projects as well as impair Chile's appeal as a destination for foreign investment.