Chile’s Supreme Court signals death knell of Kinross gold mine

Located in northern Chile, Maricunga produced 44,304 gold equivalent ounces in the second quarter of the year, or about 6% of Kinross’ total output. (Image courtesy of Kinross Gold)

Chile’s Supreme Court upheld an environmental order for a gold mine owned by Canada’s Kinross Gold Corp to close its water pumping wells, the environmental regulator said on Wednesday, bringing down the curtain on a long-running dispute that sparked the miners’ retreat from Chile.

The environmental watchdog, known locally as the SMA, initially ordered that the wells serving the Maricunga mine be shut down in 2016. The ruling was challenged by Kinross in Chile’s environmental tribunal and then in the country’s highest court.

The Supreme Court on Wednesday backed the original order, pointing to the “inadequate management of unforeseen environmental impacts on the Pantanillo-Ciénaga Redonda basin”, which is located in Chile’s northern Atacama desert.

Kinross, the world’s fourth largest gold miner by output in 2017, halted all extraction, grinding and stockpiling of ore and laid off 300 staff in the fourth quarter of 2016 after the original ruling in March that year.

At the time, local news media quoted the company as saying that environmental damage in the area had been caused by drought rather than extraction operations.

The Maricunga mine accounted for 8 percent of the company’s total gold production in 2015.

(By Fabian Cambero and Aislinn Laing; editing by Jonathan Oatis)