Diario La Tercera  /  AP file
The protests against a proposed $1.5 billion gold mine in the Andes have included this one in front of Chile's presidential palace on Feb. 16 in Santiago.
updated 2/23/2006 2:45:32 PM ET 2006-02-23T19:45:32

As the world’s largest gold mining company, Barrick Gold Corp. of Canada is used to thinking big.

So perhaps it wasn’t all that shocking that the company planned to relocate three huge ice fields — Barrick hates to call them glaciers — to dig for gold high up on the spine of the Andes mountains.

Oceana, Greenpeace and other environmental groups have raised an outcry over the proposed open pit mine, and Barrick countered with a multimillion-dollar lobbying campaign seeking Chile’s approval for the $1.5 billion Pascua Lama project.

Barrick appeared to win the latest round on Feb. 15 when a regional Chilean environmental agency approved the mine — as long as the ice remains untouched while they dig up the more than 17 million ounces of gold. That's worth $9.35 billion at today’s prices, which have risen sharply recently to an average of $550 a troy ounce.

The Toronto-based company — which became the world’s largest gold miner when it acquired 81 percent of former rival Placer Dome Inc. last month — reported Wednesday its annual net income for 2005 increased 62 percent, to $401 million. Fourth-quarter profits rose to $175 million from $156 million in the year-ago period, thanks to $50-per-ounce higher price for gold.

Barrick had planned to expose the gold under the ice by breaking up part of the glaciers and dumping the ice in nearby spots along Chile’s 13,100 foot-high border with Argentina. The company hasn’t explained how it will reach the gold without disturbing the glaciers, but praised the decision nonetheless.

“We are satisfied with the approval of Pascua Lama and within that framework we will dedicate the next few weeks to study each demand and conditions set in the decision to proceed ahead with the project,” a company statement said.

Female president lobbied
Environmentalists plan appeals to Chile’s council of ministers and ultimately to incoming President Michelle Bachelet, who takes office on March 11. They’re hoping for a sympathetic hearing from Chile’s first woman president, who has promised to create a ministry of the environment. And Barrick must get similar approvals from the Argentine government

“This battle is just beginning,” vowed Mirna Inostroza, who lives downstream from the project in the fertile Huasco valley, where some 6,000 people live and grow grapes, avocado, olives and other crops.

There hasn’t been a similar opposition movement in Argentina, in part because reaching the gold on that side won’t involve interfering with glaciers. However, Argentina has yet to approve the project, and a commission of Argentine government officials and environmentalists will soon visit Chile to learn how the case has been handled here.

Mining is such a key industry in Chile — accounting for a third of the nation’s $100 billion GDP and 60 percent of its exports — that few expect Barrick to lose in the end.

Cyanide concerns
And even if the glaciers are preserved, some Chileans fear the open pit mine will contaminate their water or make their rivers run dry. Antonia Fortt, an environmental engineer with Oceana, said “the fears about cyanide are justified because this chemical is used to separate the gold from the sterile material, rock and dust, it comes mixed with.”

Barrick counters that the project has been designed to ensure the continued flow of unpolluted water into the valley. The cyanide will be kept in a closed, lined area, and after it’s used to extract the gold, it will be collected and destroyed, spokesman Vince Borg said from Toronto.

“The way you avoid incidents with cyanide is a very high awareness that it can be properly and responsibly managed through such operating methods as very precise transportation procedures and protective measures, and having a response team to deal with any exposures, if they occur,” he added. “We have never had a leak or incident of any consequences related to cyanide.”

Borg also says Barrick has listened to the naysayers, and found many of their points to be valid, especially the need to monitor the quality and quantity of the water in rivers fed by the glaciers. “We have incorporated those concerns into our plans and have modified the project to accommodate those issues,” Borg he said.

Barrick also plans to spend $60 million to build a channel to divert water away from the mine, as well as a reservoir so that the farmers in the valley below can have a clean, plentiful water supply, Borg said.

PR battle over ‘glacier’
For months, the controversy centered on the ice itself. Barrick has insisted that the ice fields — Toro 1, with an area of 138,500 square meters, Toro 2 at 129,200 square meters and Esperanza at 78,900 square meters — can’t be called glaciers. The company prefers the terms ice reservoirs, ice masses or glaciarets.

Glacier, however, is the proper scientific term, according to Cedomir Marangunic, one of Chile’s top glaciologists — “glaciaret or reservoir are not used by the scientific community, really.”

“A glacier is a mass of ice that moves slowly down a mountain,” he added. “A glacier requires a depth of at least seven to 11 meters (yards) to be considered such, and in this case, the Toro 2 is in that range, the others are around 20 meters deep.”

Oceana spokesman Pablo Andrada said Barrick was reluctant to call them glaciers “because everybody knows a glacier is something important, permanent, that must be protected, unlike a simple ice mass or reservoir.”

No one expects Barrick to let the glaciers get in the way of the gold reserves at Pascua Lama. Oceana engineer Fortt figures Barrick will dig up “to the rim of the glaciers, and then either stop or start an underground operation.”

Thousands of jobs promised
Meanwhile, opinions are split in the Huasco valley. Many in the remote area — 445 miles north of Santiago — see the mine as essential to the local economy. Barrick has promised 4,000 construction jobs, and once production starts in 2009, 1,500 more jobs for the 20 years it will take to mine the gold.

“Yes, there are people here who support the mine,” admitted Inostroza. “They do so because they think the mine will bring jobs and other benefits. But deep in their hearts they know there will be terrible pollution.”

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