Chile court freezes Glencore hydroelectric project

Reuters

SANTIAGO, Oct 25 (Reuters) - A Chilean appeals court hasblocked a recently approved $733 million hydroelectric dam onenvironmental grounds, a surprise blow to owners Origin Energy and global miner Glencore Xstrata PLC.

Opponents of the 640-megawatt Rio Cuervo project planned inthe remote southern Aysen region say it would be built above ageological fault line and could foment quakes in highly-seismicChile.

The project had received the green light from the SEAenvironmental regulator just last month.

The fresh freeze on the complex is another blow forenergy-strapped miners in copper powerhouse Chile, where unclearrules has allowed environmental and social groups to appealagainst projects even after approval, putting in limbo billionsof dollars of investment.

Lawyers from the environmental prosecutor's office lodgedthe appeal, claiming the plant's approval was not legal, andarguing that the project threatens a local river and posesgeological risks.

Construction will be blocked until the court rules on thecase.

"In Coyhaique the case will be dealt with in about two tothree months," a court source told Reuters. "At this point...thecase will probably arrive at the Supreme Court next year, if(one or more parties) seek to elevate it."

Australia's Origin Energy, which owns 51 percent of theproject, and Glencore, which has a 49 percent stake, run theproject through their joint venture Energia Austral.

Energia Austral could not immediately be reached forcomment.

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