Glacier gold mine 'will taint pristine valley with cyanide'

The world's biggest gold mining company is locked in a battle with conservationists over the future of a remote Chilean valley where campaigners say a proposed mine will threaten water supplies and destroy the environment.

Canadian-based Barrick Gold last week won approval from the Chilean government to proceed with the $1.5bn project that could see millions of ounces of gold removed over 20 years, at the risk of poisoning the Andean valley with cyanide.

The company says the Pascua Lama mine will provide hundreds of jobs to local people but but campaigners argue the short-term economic benefits will be limited while the environmental impacts could last for generations. They say it is another example of a powerful foreign corporation exploiting the resources of the developing world.

"The problem with gold mining is they use cyanide [and other] toxic materials," said Samuel Leiva, a campaigner with Greenpeace Chile, one of several local groups opposed to the mine. "The toxic waste for the process can drain into the rivers. That is the real problem for the valley."

The Pascua Lama mine has became a cause célèbre among campaigners, who have fought against the proposals for the past decade. Despite last week's approval by the Chilean National Environment Commission (CONAMA), campaigners say they will file further lawsuits . They will also pursue existing lawsuits filed by indigenous rights groups who contest Barrick's ownership of the property. They hope the matter will be examined by the Inter-American Human Rights Court.

The ore was originally discovered in the mountains 80 miles south-west of the Chilean city of Vallena, and located in both Chile and Argentina. If the project goes ahead it would be the first bi-national mine in the world.

Three-quarters of the ore is located in Chile and the remainder in Argentina, where authorities have yet to give approval.

"There are a raft of problems on both the Chilean and Argentine side to do with contamination," said Jamie Kneen of Mining Watch Canada, an Ottawa-based watchdog. "The picture is pretty much the same the world over...[The company] will contribute a little to the local economy but not nearly like what they contribute to their shareholders."

There has been a recent mining boom in parts of the developing world, fuelled by rising demand for gold jewelry in new economies such as India and China. With most of the best and most accessible ore exhausted, mining companies from America, Canada and Australia are increasingly turning to less-easily obtained supplies located in the developing world - often where environmental standards are less strict and where they are able to obtain favourable deals.

A recent report produced by the University of Diego Portales, warned the Pascua Lama mine could have "devastating" consequences on community water rights and indigenous farmers. Meanwhile, the UK-based charity CAFOD recently warned in a general report about gold mining: " Gold is a symbol of wealth and power but for many people in developing countries gold mining has done little to reduce poverty. Mining can generate revenue and create jobs. It can also cause lasting damage to communities and to the environment." Barrick says the mine will create 5,500 jobs during the three years of construction and 1,600 jobs for 20 years. It says a "significant component" of the $1.5bn capital would be directly invested in the Huasco province.