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Chile Court Suspends Barrick's Pascua Lama Mine

The mining giant said construction activities in Argentina are not affected by the suspension, but since most of the reserves lie in Chile, a permanent ban could mean the project's end. The company said, however, that it's "too early to assess the impact, if any, on the overall capital budget and schedule of the project."

The suspension will remain in effect until the company addresses the problems and consults with the local indigenous group, said Lorenzo Soto, a lawyer representing the Diaguitas indigenous community.

"If the mining company wants to continue its project it will have to meet the current legal standards," Lorenzo told CNN Chile. "Among those is the decision of consulting the community. It's clear that this project never consulted with the indigenous people."

Barrick says Pascua Lima has 17.9 million ounces of gold reserves, and the company believes it will be one of the world's biggest and lowest-cost mines. But the mine has gone off track. Its start date has been delayed by more than six months to the second half of 2014. Cost overruns rose from an original $3 billion to more than $8 billion last year.

The project has also been opposed by environmental groups in Argentina, where the congress passed a law in 2010 to curb mining around the country's glaciers as a way to protect water supplies.

Barrick obtained injunctions blocking enforcement of the glacier law, but Argentina's Supreme Court ordered the government to prepare a national water resources inventory mapping the location of glaciers and peri-glacial areas â¿¿the rocky underbeds that still hold significant water after glaciers have retreated.

"The environmental impact provoked by mining and the Pascua Lama project in particular have been well proven in Chile," said Gonzalo Strano, a Greenpeace coordinator for a campaign protecting glaciers in Argentina.

"With even more reason the project should be canceled on the Argentine side, as it is being developed in a permafrost area protected by the glacier law and within a biosphere that should be shielded."

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