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Chile's Indians take on world's largest gold miner

Published on NewsOK Modified: May 25, 2013 at 7:16 am •  Published: May 25, 2013

EL CORRAL, Chile (AP) — The Diaguita Indians live in the foothills of the Andes, just downstream from the world's highest gold mine, where for as long as anyone can remember they've drunk straight from the glacier-fed river that irrigates their orchards and vineyards with its clear water.

Then thousands of mine workers and their huge machines moved in, building a road alongside the river that reaches all the way up to Pascua-Lama, a gold mine being built along both sides of the Chile-Argentine border at a lung-busting 16,400-feet (5,000 meters) above sea level.

The crews moved mountaintops in preparation for 25 years of gold and silver production, breaking rocks and allowing mineral acids that include arsenic, aluminum and sulfates to flow into the headwaters feeding Atacama desert communities down below.

River levels dropped, the water is murky in places and the Indians now complain of cancerous growths and aching stomachs. There's no way to prove or disprove it, but villagers are convinced Barrick Gold Corp. is to blame for their health problems.

"We don't know how much contamination the fruit and vegetables we eat may have," complained Diaguita leader Yovana Paredes Paez. "They're drying up the river, our farms aren't the same. The animals are dying of hunger. Now there's no cheese or meat. It's changed completely."

Acting independently, Chile's newly empowered environmental regulator on Friday confirmed nearly two dozen violations of Barrick's environmental impact agreement, blocking construction on the $8.5 billion project until the Canadian company keeps its promises to prevent water contamination.

The Environmental Superintendent, Juan Carlos Monckeberg, also fined Barrick $16.4 million, the highest environmental fine in Chile's history, saying agency inspectors found the company hadn't told the full truth when it reported failures.

"We found that the acts described weren't correct, truthful or provable. And there were other failures of Pascua-Lama's environmental permit as well," Monckeberg said.

Barrick promised $30 million in fixes and said it remains committed to meeting the highest standards and causing no pollution. But Chile seems determined to minimize the dangers of digging huge pits and processing ore with toxic chemicals along the spine of the Andes, causing delays that threaten the future of this top priority for the world's largest gold-mining company.

"We're profoundly sorry that Pascua-Lama has suffered obstacles in its construction and we'll make our best efforts to get back on track and meet the conditions stipulated in the approved project," Eduardo Flores Zelaya, president of Barrick Sudamerica, said Friday. "We are respectful of the institutions in the countries where we operate, and as a consequence we will follow the resolution."

Monckeberg said Barrick caused permanent damage by failing to properly construct a diversionary canal, triggering a rockfall that covered a field down below with waste rock.

"I don't believe there's any way of repairing it," he told a news conference in Santiago.

Barrick had hoped to begin production in early 2014, and warned shareholders that it might abandon Pascua, the Chilean side, if construction delays keep the mine from opening this year.

Argentine authorities, meanwhile, have insisted that Lama will proceed with or without Chile, taking advantage of nearby infrastructure used for Barrick's Veladero mine, which produces ore just downhill.

Together, the two projects employ thousands of workers, fuel a third of the provincial San Juan economy, and promise millions in revenue for a country sorely in need of hard currency. But more than 70 percent of Pascua-Lama's 18 million ounces of gold and 676 million ounces of silver are on the Chilean side. The plan has been to extract it from huge open pits and carry it through a tunnel for processing in Argentina.

Rockfalls are just one of the threats to building anything in the high Andes, where gale-force winds have coated glaciers with construction dust for miles around and groundwater expands and contracts with each freeze and thaw. To refine ore into gold bullion, the company must transport thousands of tons of cyanide, mercury and other toxic chemicals to the mountaintop.

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