Chile top court confirms block on Barrick mine

SANTIAGO, Chile (AP) -- Chile's Supreme Court confirmed on Wednesday the suspension of Barrick Gold Corp.'s Pascua-Lama gold mine straddling the border with Argentina, but the court stopped short of ordering a re-evaluation of the environmental permit for the $8.5 billion project high in the Andes.

An indigenous community living below the mine had asked the Supreme Court to revoke Barrick's license and require the world's largest gold-mining company to prepare a new environmental impact study.

The Diaguita Indians, who accuse Barrick of contaminating their water downstream, earlier won an appellate ruling that ordered a freeze on construction of the project until the Toronto-based company builds infrastructure to prevent water pollution.

But they wanted to go further and had appealed that ruling from the court in the northern city of Copiapo in hopes of forcing Barrick to apply for a new permit that takes into account their anthropological and cultural claims to the watershed below the mine.

On Wednesday, the Supreme Court ruled the measures issued by the Copiapo Court "are sufficient to protect the constitutional guarantees that have been denounced as violated." The court also ordered "a suspension of the Pascua-Lama mining project" until environmental commitments and all works to protect the water systems are adopted.

Barrick told The Associated Press it had no immediate comment on the court ruling.

Chile's environmental watchdog agency already ordered construction stopped until Barrick builds systems to keep the mine from contaminating the watershed below, and Barrick executives have publicly committed the company to fulfilling the requirements of its environmental permit.

"The fact that the Supreme Court ratified the suspension of the project is important, valuable and satisfactory to us," said Lorenzo Soto, who represents about 550 Diaguita Indians.

"We disagree with the court, however, because it didn't allow for our request to annul the project's environmental permit," Soto said. "We believe the project has works and activities that are not authorized, that are outside the environmental permit."

The binational mine was initially expected to be producing gold and silver by the second half of 2014, but the company now targets production by mid-2016.

While Argentine officials are eager to keep building, most of the estimated 18 million ounces of gold and 676 million ounces of silver are buried on the Chilean side. On the Argentine side, where Barrick fuels a third of San Juan province's economy, officials have been watching closely and trying to figure out how to preserve thousands of jobs.

Scarce river water is vital to life in Chile's Atacama Desert, and the Diaguitas fear the Pascua-Lama mine is ruining their resource.

"The ideal thing would have been for the Supreme Court to listen to us and order Barrick to start from scratch with a new environmental impact study," Diaguita leader Yovana Paredes Paez said.

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Associated Press writers Luis Andres Henao in Santiago and Michael Warren in Buenos Aires, Argentina, contributed to this report.