Barrick Gold Corp Chairman of the board John Thornton speaks during their annual general meeting for shareholders in Toronto, April 28, 2015.
Barrick Gold Corp Chairman of the board John Thornton speaks during their annual general meeting for shareholders in Toronto, April 28, 2015. Barrick Gold Corp shareholders have voted to reject the gold miner's controversial executive compensation plan, Barrick Executive Chairman Thornton said on Tuesday. Reuters/Mark Blinch

Chile's Superintendence for the Environment, or SMA, has imposed 10 new sanctions against Canadian miner Barrick Gold, thus lessening its chances of resuming construction in its already suspended Pascua-Lama gold and silver project located in the border between Chile and Argentina.

After two years of inspection from 2013 to 2015, SMA found out that Barrick has again violated several environmental laws. Barrick has already been fined US$16 million [$20 million] in 2013 over numerous violations to the country's conservational laws. This also put the project on indefinite hold since October of the same year. It was the largest ever penalty imposed in Chile.

According to SMA, some of the broken rules are related to protecting flora and fauna, water management and monitoring glaciers. One infraction — the construction of works outside the permitted area — was deemed "very serious" by the SMA.

Big scale mining represents an important environmental challenge for Chile, making it one of the more stringent countries when it comes to mining regulations. Some of the problems brought about by mining include endangered flora and fauna species, deforestation resulting to soil erosion, air and water pollution, and severe water shortages.

Hence, mining companies are required to be compliant with the country's environmental regulations, such as rutile and titanium miner White Mountain Titanium Corporation (OTCQB: WMTM). Its Cerro Blanco Project is undergoing baseline environmental monitoring since 2006. Its EIS application has been submitted in February 2013, and three addenda have already been completed in March 2014, October 2014 and February 2015, respectively. The company's community involvement and community consultations are likewise ongoing. White Mountain expects to receive its EIS approval sometime in 2015.

Eduardo Flores, chief executive of Barrick Chile, admitted that the new charges are further complicating the status of the project. "While in the past we have made mistakes, we took charge and apologised," he said in an interview in a Spanish paper. "We've been humble and transparent about it … We know that restarting the project requires showing that we now have a new and better way to address its challenges."

At one time, the Pascua-Lama Project was Barrick's biggest development project, expected to produce about 800,000 to 850,000 ounces of gold per year in the first five years of its 25-year life. However, production had to be stopped not only due to legal reasons but also due to the company's own reasons. Barrick mothballed the project after investing US$5 billion [$6.2 billion] in it, while facing cost overruns and a falling gold price. Aside from those things, the project was also plagued with permit issues, labour unrest, and political opposition.

Once SMA finalises the new sanctions, Barrick could appeal to Chile's environmental court. Depending on the outcome, the company can also file a plea with the Supreme Court.

Contact the writer: a.lu@ibtimes.com.au

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