Barrick Slumps As Chile Court Delays Work On Mine
NEW YORK (AP) â¿¿ Shares of Barrick Gold Corp. fell Wednesday after a court in Chile suspended work at one of Barrick's mining projects, citing environmental concerns.
THE SPARK: The court suspended activity at the Pascua Lima mine. Chile's interior minister said he was pleased with the news, and hopes Barrick can fix problems at the mine. The Pascua Lima mine straddles the border of Chile and Argentina. Indigenous communities have complained that the project threatens their water supply.
Barrick said it is aware of reports of the court's decision, but hasn't been formally notified. The Canadian company said it will assess the implications of any order and added that the decision wouldn't affect activity in Argentina, where most of the mine's key infrastructure is located.
THE BIG PICTURE: Barrick is the world's largest gold producer. The company had 140 million ounces in proven gold reserves at the end of 2012, as well as 1.05 billion ounces of silver and 13.9 billion pounds of copper. It expects to produce 7 million to 7.4 million ounces of gold this year.Barrick has three other mines in South America â¿¿ two in north central Peru and one in Argentina. Those mines produced more than 1.6 million ounces of gold last year, and they are expected to yield about 1.3 million ounces in 2013. 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. However the start date of mining operations was delayed more than six months, into late next year, before the court decision. And costs have been far higher than expected, rising to more than $8 billion from the $3 billion originally expected. The company also has 10 active mines in North America and nine in the Australia-Pacific region, some of which are operated through joint ventures. Its African operations are run by African Barrick Gold PLC, a separate company in which Barrick Gold owns a 74-percent stake.
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