Recently, the media reported that Canadian gold miner Barrick Gold Corporation (ABX) has delayed construction of its Pascua Lama mining project in Chile due to pending environmental permits.
In July of this year, Barrick Gold had announced the start of the construction of Pascua Lama, on the border of Chile and Argentina, before September. The project was approved by the Chilean environmental impact evaluation system through a resolution issued in 2006. However, the resolution also determined that the initiative needed to meet a number of environmental conditions and requirements before construction could start.
Environmentalists have criticized Pascua Lama, claiming that operations at the mine will affect the water resources in the vicinity. However, the company has denied the claims and notified that it plans to set up monitoring points to prevent water pollution. The company will set up 87 monitoring points, of which 49 will be in Chile and the rest in Argentina, to measure the contents of the water descending from the mine, set to stand at 5,200m above sea level at its highest point.
The mine is expected to have an annual production capacity of 750,000-800,000 ounces of gold and 35 million ounces of silver its first five years of operation. Start-up capital expenditure is expected to be $2.8 billion-3.0 billion. The mine is expected to have an operating life of 25 years. Barrick now aims to commission the mine in late 2012 and start production in early 2013. The company plans to employ 5,500 workers during construction and 1,600 during operation.
Barrick Gold Corporation is the largest pure gold mining company in the world. The company also has the largest reserves in the industry, with 138.5 million ounce of proven and probable gold reserves and 6.4 billion pounds of copper reserves. The company competes with gold producers such as Newmont Mining (NEM), based in the U.S., and AngloGold Ashanti (AU), based in South Africa.
Barrick has been suffering from the slowdown in the global economy, especially in India, which has seen weak demand for gold. India, which absorbs about 50% of world production, has witnessed a lower GDP growth. A stronger dollar has further impeded demand for gold. Barrick anticipates its gold production to decrease to 7.2 million–7.6 million ounces in 2009 compared to the 2008 level, which will mainly stem from lower production in North America.
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