- The Washington Times - Friday, February 24, 2006

SANTIAGO, Chile — The world’s largest gold mining company, Barrick Gold Corp. of Canada, can take the top off a mountain. Barrick first proposed mining gold locked in ice along the spine of the Andes by breaking up part of the glaciers and dumping the spoil near Chile’s 13,100-foot-high border with Argentina.

Oceana, Greenpeace and other environmental groups 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, worth $9.35 billion at today’s prices, which have risen sharply recently to an average of $550 a troy ounce.

The company hasn’t explained how it will reach the gold without disturbing the glaciers, but praised the decision nonetheless.

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 that 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.

“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.

Environmentalists plan to make appeals to Chile’s council of ministers and ultimately to Michelle Bachelet, who takes office on March 11. They are hoping for a sympathetic hearing from Chile’s first female 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,” said Mirna Inostroza, who livesdownstream from the project in the fertile Huasco Valley, where about 6,000 people live and grow grapes, avocados, 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 gross domestic product and 60 percent of its exports — that few expect Barrick to lose in the end.

But 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 said. “We have never had a leak or incident of any consequences related to cyanide.”

Mr. Borg also said 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,” he said.

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

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