South African miner Gold Fields (JSE, NYSE: GFI), already dealing with the effects of inflation and the relocation of endangered chinchillas at its Salares Norte gold project in Chile is now facing potential sanctions from the country’s environmental regulator due to the death of specimens of culpeo fox in the area.
The Superintendency of the Environment (SMA) has ordered the company to implement a series of “urgent” and “transitory” measures after the miner reported three incidents around the project that included the death of three culpeo foxes, a species found in the Andes.
The SMA boss, Emanuel Ibarra, said its office constantly monitors the environmental impact of the Salares Norte project, located at 4,200m above sea level, in the dry Atacama region.
“Given the environmental risk tied to the [culpeo fox] species, and bearing in mind the high degree of sensitivity of the ecosystem in which the project is located, we are asking the company to fulfill the requested demands as soon as possible”, he said in a statement.
The issues the SMA is asking Gold Fields to address include submitting new reports of the three incidents informed, incorporating graphic records and studies from specialists, as well as restricting traffic speed in all the project’s interior roads to 40 km/hour.
The watchdog has also demanded Gold Fields re-define emergency reports to include the nature of the environmental impact caused, the relevance of the element impacted and the reversibility of the damage.
This is not the first time Gold Fields has to tip-toe around species native to the project’s area of impact. In 2020, the miner began relocating 25 chinchillas, short-tailed rodents found only in the north of Chile and which are protected by law.
The operation was going according to plan until the SMA halted it, after one chinchilla suffered a broken leg and two others died. After a series of studies the SMA requested Gold Fields to come up with with a new plan to relocate the bluish-grey furred rodents.
The company, which began construction of $860 million project last year, expects to kick off production in the first quarter of 2023.
Gold Fields will process two million tonnes of ore per year for the production of doré gold once the project is commissioned, over a 10-year mine life.
Salares Norte hosts 3.5 million ounces of gold, 39 million ounces of silver, and 695 million pounds of copper.
Discovered in 2011, Salares Norte is one of five gold projects set to begin operations in the South American nation over the next two years.
Chile’s gold production peaked in 2000 at 54.1 tonnes, data from the country’s copper commission, Cochilco, shows. The nation, the no.1 copper producer and second-largest lithium producer after Australia, currently ranks 16th among the world’s top gold producing nations, according to IndexMundi.com.
Other gold projects set to come online in Chile by 2023 are Kinross Gold’s La Coipa Restart, Yamana Gold’s El Peñón expansion, Canadian Rio2’s Fenix and Australia’s Kingsgate Consolidated’s Nueva Esperanza.