Chile's Bachelet coy on Pascua-Lama, says mine must follow rules

Reuters News
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Posted: Aug 13, 2013 12:32 PM
Chile's Bachelet coy on Pascua-Lama, says mine must follow rules

SANTIAGO (Reuters) - Michelle Bachelet, the favorite to win this year's presidential election in Chile, said on Tuesday Barrick Gold Corp's suspended Pascua-Lama gold project must comply with regulatory orders before an assessment can be made of whether the controversial mine project should continue.

Bachelet, a popular center-left politician who governed the Andean country from 2006 to 2010, is expected to win handily against a weakened right wing in November's election, or possibly in December if a run-off is needed.

Toronto-based Barrick "has a responsibility to implement all measures relating to water systems and other things it must do so that it can be given the go-ahead or not," she told foreign journalists during a news conference.

Bachelet didn't pronounce herself in favor or against the mammoth Pascua-Lama gold mine, which straddles the Chilean and Argentine border high in the Andes.

In the past, she has deemed Chile's unpopular HidroAysen hydropower project "not viable", but hasn't commented much on the key mining sector.

Development of the Barrick mine, expected to cost up to $8.5 billion, has been suspended by an appeals court and Chile's environmental regulator after indigenous communities said it was contaminating the local water supply and agriculture.

Chile's environmental regulator has asked Barrick to build canals and drainage systems, citing major environmental violations.

"It could be that institutionality wasn't strong enough, or that there wasn't enough oversight, or that the communities weren't listened to soon enough," Bachelet said, pointing to possible reasons for the environmental damage.

Barrick has said it is committed to building the infrastructure required to prevent water pollution.

The project's supporters say its environmental impact will be limited, and that the mine will provide employment and help boost booming Chile's mining-dependent economy.

Environmental and social groups counter that the massive project will damage pristine glaciers, strain and pollute water supply, and harm agricultural activity in the area.

(Reporting by Antonio de la Jara; Writing by Alexandra Ulmer; Editing by Peter Galloway)