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Chile Blocks World's Highest Mine Project

Monckeberg said the sanctions, the first since his agency gained enforcement power in December, were based on a thorough investigation by agency inspectors as well as government experts in mining, farming, and water

Pascua Lama was temporarily halted last month by an appeals court in the northern city of Copiapo after members of the Diaguita indigenous community complained that the project threatens their water supply and pollutes glaciers.

"This is what we have always been hoping for," said Maglene Campillay, a Diaguita Indian leader whose community downstream from the mine alleges that its river has been contaminated by the construction work. "Finally the state is showing its power. They never investigated this and now they're doing their job."

The regulator found 23 violations, and Barrick accepted all but one of them in a detailed response on April 29.

But the sanctions don't mean the end of Pascua-Lama â¿¿ far from it.

In its response, Barrick asked for permission to make $30 million in urgent repairs, saying "they turn out to be fundamental to keeping the first ice melts of this year from causing events that trigger effects or environmental contingencies." The environmental agency approved the remedial work on Friday, starting with temporary measures to contain any runoff while Barrick builds more permanent structures.

The violations include building some earthworks without prior approval, while failing to build others that were supposed to be in place before other construction began, so that rainfall wouldn't increase the runoff from mineral acids naturally released when rocks are broken. Instead, Barrick's bulldozers went ahead and moved mountaintops in preparation for a projected 25 years of gold and silver production.

The violations also include an "unjustified discharge coming from the acid treatment plant to the Estrecho river" that was "neither declared nor monitored," Barrick acknowledged.

Still, the Diaguita Indians, who live in small towns along rivers that flow down from the mine through an otherwise completely barren Atacama Desert, were feeling powerful on Friday.

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