By ROB GILLIES
TORONTO (AP) a¿¿ The world's largest gold mining company is indefinitely suspending construction of its troubled gold mine straddling the Chile-Argentine border, part of a cost-cutting effort that also involves 10 other mining projects around the world.
Restarting the $8.5 billion Pascua-Lama mine will depend on a rebound in metals prices and assurances that Barrick Gold can make profits in an uncertain legal and regulatory environment, the company announced Thursday.
"We have determined that the prudent course - at this stage - is to suspend the project, but naturally we will maintain our option to resume construction and finish the project when improvements to its current challenge have been attained," Barrick chief executive Jaime Sokalsky said in a statement.
Falling gold prices, rising costs and a sagging stock price weighed down by its Pascua-Lama project have plagued the Toronto-based company. Barrick said the suspension will reduce the company's 2014 capital costs by up to $1 billion. The company also said 10 other mines around the world were being scaled back, suspended or sold to focus on more profitable production, part of an overall effort to save $2 billion.
Barrick has already spent $5 billion on the project being built between glaciers at up to 17,000 feet (5,200 meters) above sea level. Earlier this year, Chile's environmental regulator stopped construction on its Pascua side of the project, and imposed sanctions citing "serious violations" of its environmental permit.
No such violations were declared in Argentina despite a national law banning mining on or amid glaciers. In Argentina, mining is mostly regulated at the provincial level, and Barrick's operations represent a third of the local San Juan province's economy.
Barrick had hoped to begin production in early 2014, and previously warned shareholders that it might abandon the Chilean side altogether because of construction delays. The bi-national mine was initially expected to be producing gold and silver by the second half of 2014.