Lundin shares dropped on the news
A sinkhole near Toronto-based Lundin Mining Corp.’s copper mine in Chile was formed due to excessive mining, the nation’s investigative authorities said.
Chile’s mining minister Marcelo Hernando said in a press release that the initial investigation points towards “overexploitation” in the Gaby 4 cave — located in the vicinity of the 36.5-metre-wide sinkhole — by Lundin’s Chilean unit Ojos del Salado.
Lundin shares dropped on the news, extending a decline that began earlier this month after the company disclosed that the sinkhole had been discovered, exposing Lundin to delays, repair costs, and political risk in a country that has become less tolerant of the environmental impact of mining.
Ojos del Salado has extracted 300,000 tonnes of copper from Gaby 4, and the company anticipated the pit yielding at least another 300,000 tonnes, “which would be higher than the authorized volume,” Bank of Montreal analyst Jackie Przybylowski, who follows Lundin Mining, said in a research note on Monday.
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