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Chile judge visits Barrick's Pascua Lama mine

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LUIS ANDRES HENAO | July 1, 2013 04:19 PM EST | AP

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SANTIAGO, Chile — A Chilean judge visited Barrick Gold Corp's Pascua Lama mine on Monday to review the suspended project before he rules on whether construction can resume at the world's highest-altitude gold mine.

Appeals court Judge Antonio Ulloa temporarily suspended construction work in April after siding with members of the Diaguita indigenous community who say the mine threatens their water supply and pollutes nearby glaciers.

"A personal inspection had never been issued before but this shows the concern of the court to be as accurate as possible when it comes to its ruling," Ulloa said before his trip to the mine, which straddles the Chile-Argentine border at 16,400 feet (5,000 meters) above sea level.

The judge is joined by company officials, environmental regulators and leaders of the Diaguita, who live in the foothills of the Andes downstream from the mine.

"Today's visit by the appeals court judge to Pascua Lama is an unprecedented measure for Chile's courts. On behalf of the Diaguita indigenous communities, we greatly value this gesture and we think it meets the requirements for justice that we're asking for on behalf of the indigenous people," said Lorenzo Soto, a lawyer representing some 500 Diaguita who have joined in a civil lawsuit against Barrick.

"We hope this sets a precedent that will be followed from here on out and will finally convince everyone of the great harm that Barrick has caused to the Diaguita territory in Chile."

Acting independently, Chile's environmental regulator also blocked the $8.5 billion project in May and imposed the highest environmental fine in Chile's history, citing "very serious" violations of its environmental permit as well as a failure by the company to accurately describe what it had done wrong.

Barrick promised $30 million in fixes and said it remains committed to meeting the highest standards and causing no pollution. More recently, it said it would take until December 2014 to finish the water management infrastructure demanded by the regulator to restart the mine.

Chile seems determined to minimize the dangers of digging huge pits and processing ore with toxic chemicals along the spine of the Andes, causing delays that threaten the future of the most important project for the world's top gold mining company.

Argentine authorities have insisted that Lama, their side of the bi-national project, will proceed with or without Chile, taking advantage of the infrastructure already in place for its Veladero mine, which is already producing ore just downhill.

But most of Pascua-Lama's estimated 18 million ounces of gold and 676 million ounces of silver are in Chile, where Barrick warned shareholders earlier this year that it might abandon the project if production can't begin in 2013.

Barrick said Friday construction of Pascua-Lama will likely take a write-down of between $4.5 billion and $5.5 billion in the second quarter on the project. The company now targets production by mid-2016 compared to the previous schedule of the second half of 2014.

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Luis Andres Henao on Twitter: https://twitter.com/LuisAndresHenao