Barrick still committed to Chile, despite Pascua-Lama setback
Canada’s Barrick Gold (TSX:ABX) (NYSE:GOLD) said Wednesday its interest in Chile remains strong despite local authorities ordering the “total and definitive” closure of its Pascua-Lama gold-silver project over environmental issues.
The world’s largest gold miner, which completed its merger with Randgold at the beginning of the year, is currently reviewing a range of “new exploration opportunities” and re-evaluating its existing operations and projects in Chile, chief executive officer Mark Bristow said after a meeting with Minister of Mining Baldo Prokurica.
Bristow said the company’s assets in Chile, the world’s top copper producing country, were an important part of its global portfolio. He noted that Barrick had recently approved an investment to increase productivity at the Zaldívar copper mine, jointly owned with Antofagasta plc. (LON:ANTO).
His comments come after the new Barrick discharged its executive director in Chile, Rene Muga, last month and transferred his functions to Marcelo Álvarez, the company’s executive director in Argentina.
The move raised speculations about the future of Barrick’s operations in Chile, where the company has spent about $8 billion over the last decade.
Bristow, who is currently in Chile to review the company’s regional strategy, said the studies on the Norte Abierto copper and gold joint venture project with Canada’s Goldcorp were advancing. He also noted the Alturas project, also located in northern Chile’s Atacama region, was making “good progress” and the miner is currently exploring for further discoveries in the vicinity.
Ahead with the Lama portion
The original mine plan for Pascua-Lama 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 the company 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.
A year later, 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.
But eventually it had to give it up.
Barrick’s new president and CEO, however, has not. He said Barrick was now focused on resolving legal, environmental and other issues along with a technical review of the project’s parameters and future potential.
“Chile is an investor-friendly country, with a significant mineral endowment, and which encourages the development of mining projects,” Bristow said. “We believe there are exciting opportunities here, especially in the El Indio region.”
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.
For now, Barrick’s main priority in the region is increasing efficiencies at Veladero, one of the largest gold mines in Argentina.