Chile’s Superintendency of the Environment (SMA) filed charges against Lumina Copper on Tuesday for infractions to the provisions established in its Resolutions of Environmental Rating (RCA), both at the Caserones mine and the Electric Transmission Line necessary for the development of the project.
Lumina Copper faces fines of up to $54.8 million for infractions to the provisions established in its mining permit, including extracting water beyond the authorized amount.
The agency said the charges against Lumina include the miner’s failure to provide the SMA requested information related to the partial compliance of orders issued last year, which instructed the company to implement mitigation measures to prevent the contamination of underground water supplies.
Eleven of the 18 irregularities the SMA found at the operation were considered “severe,” which means Lumina may have to give up its environmental permit, face short-term or permanent closure of Caserones, or pay the multi-million dollar fine — the country’s highest ever fine levied on a mining company.
The agency noted Lumina Copper Chile has 10 days to come up with a mitigation program and 15 to respond to the charges.
This is not the first time the agency has fined Lumina. In 2015, SMA ordered Lumina to pay $11.9 million for breaching environmental rules. At the time, it was the second-highest fine the SMA had imposed since it was created in 2012.
The largest penalty until then — $16 million — was issued in 2013 to Barrick Gold’s (TSX:ABX) (NYSE:GOLD) now shelved Pascua Lama gold and silver mine.
Caserones is located at an altitude of 4,200m to 4,600m above sea-level in the Atacama Desert region, close to the border with Argentina. The mine is operated by Lumina, and is 77% -owned by Pan Pacific Copper, a firm controlled by JX Nippon Mining & Metals under JX Holdings Inc. Japanese trading house Mitsui & Co Ltd holds the remainder.
The copper mine, behind schedule ever since it began producing in May 2014, not only has been hit by fines and a series of technical problems in its ramp-up phase, but it has also cost the Japanese miners hefty charges.