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Barrick Gold Corp. has struck a deal with the indigenous groups that opposed the company’s mothballed Pascua Lama project. But the miner must still overcome huge obstacles before it can resume developing the massive gold and silver deposit in the Andes.
The mountaintop project on the border between Chile and Argentina has been put on hold indefinitely while Toronto-based Barrick waits for market conditions to improve.
The company’s mismanagement of Pascua Lama pushed costs up to $8.5-billion as the gold market soured, forcing Barrick to halt construction late last year in order to conserve cash.
Although Barrick is nowhere close to restarting the South American project, the company said Wednesday that it had reached an initial agreement in April with 15 Diaguita communities in Chile.
Barrick said it will share technical and environmental information about Pascua Lama with the indigenous groups as well as provide funding for any independent analysis.
“We believe this agreement will form the basis of a new relationship with Diaguita communities, one based on transparency, openness and trust,” Barrick spokesman Andy Lloyd said in an e-mailed statement. “Earning that trust will take time, and it will require consistent engagement and commitment,” he said.
The initial agreement is a positive step for Barrick and could eventually make it easier for the company to build the mine. The company has recorded nearly $6-billion (U.S.) in writedowns related to Pascua Lama and has been hit by lawsuits from investors alleging that the company misled them about the project.
Over the past few years, the Diaguita people took Barrick to court in an attempt to stop the mine. Their lawyer told a local radio station in Chile on Wednesday that “the communities have not renounced any legal action,” according to Reuters.
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