Construction of the Pascua Lama mine, which straddles the border between Chile and Argentina, was scheduled to begin two years ago. But the lucrative project remains on hold while a dispute continues between the governments of Chile and Argentina regarding taxation. The Chileans seek the lion’s share of taxes levied, arguing that 80% of the deposit is located in their territory. Argentina is pushing for an even split. A June proposal from the Chilean government, which sought to break the impasse, was reportedly rejected by Buenos Aires. The Chilean Minister of Mines blames the Argentineans for jeopardizing the project by imposing an unreasonable tax burden on the company.
Rumours abound that Barrick will bypass the protracted tax conflict by redesigning the project so that its operations are restricted to Chilean territory. In recent days Chilean authorities have expressed a clear commitment to the project and have expressed interest in exploring new options for its development.
According to media reports, the Governor of San Juan, the Argentinean province where part of the Pascua Lama deposit is located, recently met with high-ranking company officials. Meeting participants confirmed that the company plans to sever the Argentinean component, which reportedly infuriated the governor. According to government officials in San Juan, the project is in the final stages of approval at the provincial level.
Pascua Lama is the first project slated for development under the unique bilateral Mining Treaty that facilitates mine development on the border between Chile and Argentina. The current conflict does not bode well for the long list of mining projects slated for development in the treaty region.
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Barrick lacks environmental permits
At OLCA’s request, the National Environment Commission (CONAMA) for the Atacama Region has confirmed that numerous environmental permits required to develop the Pascua Lama project have not yet been solicited by the company. The permits are required prior to project construction.
Moreover, should the company opt to remove Argentina from the project, additional Chilean approvals will be required. Among other modifications, Barrick would shift the location of tailings containment facilities to the Chilean side of the border, which would reportedly require the approval of an environmental impact assessment.
Catholic Bishop questions environmental approval
Bishop Quintana of the Diocese of Copiapó is calling on the Chilean government to revisit the environmental approval it granted for the Pascua Lama project. On August 5, forty religious leaders marched through Copiapó, capital of the Atacama Region. The nuns and priests initiated their protest on the banks of the Copiapó River, which was recently depleted and stands dry. Local populations, who seek to protect scarce water resources in this desert region, oppose the Pascua Lama project. Bishop Quintana stated that projects such as Pascua Lama should not be approved unless it can be demonstrated that they will not damage local environments. He called on companies and the Chilean government to protect the environment, both for current and future generations.
Alto de Carmen residents initiate blockade
Beginning August 18, residents of the Huasco Valley have blocked traffic on the road to the Pascua Lama project area. Local residents assert that the road was constructed on private land without authorization or through expropriation. They claim that road construction damaged irrigation canals essential to the local agricultural economy. According to a newspaper report, six residents are on a hunger strike.
OLCA is an institution that supports the rights of women, men and communities to defend the environment. OLCA seeks greater equality among societal actors in order to identify solutions to environmental problems. The Observatory contributes to a more democratic society by fostering processes of empowerment, organization and environmental consciousness.