The original Pascua-Lama plan, which straddled the border between northern Chile and Argentina, contemplated an open-pit operation that would have affected three small glaciers in the Andes. The project, which required an investment of more than $8 billion, was designed to generate 800,000 to 850,000 ounces of gold and 35 million ounces of silver annually during its first five years of a 25-year life. However, the mine was halted in 2013 after petitions from the Diaguita Agricultural Community and other Indigenous groups cited poor waste management and the over-extraction of glacier-fed water from the Estrecho River, a vital water source for the arid Huasco Valley.
While the main mining operation is being closed, Barrick is continuing to assess mining opportunities in the surrounding area. A recent environmental approval for the Campanario exploration project has reinforced the company’s exploration strategy near the El Indio mine and the former Pascua-Lama site. This continued activity occurs amid ongoing legal and financial disputes related to the project’s history. In February, Barrick named Mark Hill as president and chief executive, following the departure of former CEO Mark Bristow. The company is also preparing to spin off a subsidiary holding its North American gold assets in an upcoming initial public offering.
The legal fallout from the Pascua-Lama project has extended beyond environmental courts. The Ontario Superior Court of Justice has approved a class-action lawsuit against Barrick, formerly Barrick Gold, with shareholders seeking damages for alleged securities misrepresentations related to the company’s compliance with environmental permits and its capital expenditure estimates. The claims, which have not yet been tested in court, stem from the company’s failure to accurately represent the project’s status and costs. In 2016, Barrick agreed to pay $140 million to resolve a separate US class-action lawsuit alleging the distortion of facts regarding the project, and in 2017, it paid an additional $20 million to settle an arbitration case in Chile.
The project’s failure highlighted the complexities of cross-border mining initiatives. Situated at approximately 4,000 meters above sea level, the mine contained proven reserves of 18 million ounces of gold, 731 million ounces of silver, and 662 million pounds of copper. Development was repeatedly delayed by economic and tax disputes between Chilean and Argentine authorities, who disagreed on how to distribute the tax revenue from the metallic wealth concentrated primarily on the Chilean side. The site also garnered international attention for its location within the UNESCO San Guillermo Biosphere Reserve in Argentina, prompting protests from Canadian NGOs and Indigenous communities who argued the project threatened local ecosystems and water security.
Barrick’s decision to focus its remaining efforts on the Lama portion of the project in Argentina was announced in 2017, after the company sold a 50% stake in its Veladero mine to Shandong Gold for $960 million. As the closure of the Chilean site proceeds, the company remains committed to its broader exploration strategy in the Atacama region, balancing the restoration of damaged water systems with the pursuit of new mineral resources.
