October 10, 2018 / 11:14 PM / a year ago

UPDATE 1-Chile's Supreme Court signals death knell for Kinross gold mine

(Adds comment from Kinross)

By Fabian Cambero

Oct 10 (Reuters) - Chile’s Supreme Court upheld an environmental order for a gold mine owned by Canada’s Kinross Gold Corp to close its water pumping wells, the environmental regulator said on Wednesday, bringing the curtain down on a long-running dispute that sparked the Toronto-based miner’s retreat from Chile.

The environmental watchdog, known locally as the SMA, initially ordered that the wells serving the Maricunga mine be shut down in 2016. The ruling was challenged by Kinross in Chile’s environmental tribunal and then in the country’s highest court.

The Supreme Court on Wednesday backed the original order, pointing to the “inadequate management of unforeseen environmental impacts on the Pantanillo-Ciénaga Redonda basin,” which is located in northern Chile’s Atacama Desert.

Kinross told Reuters it was analyzing the decision’s implications on potential future operations at the mine.

“Mining at Maricunga was suspended in Q4 2016 and the decision is not expected to impact the status quo,” a spokeswoman said.

Kinross, the world’s fourth largest gold miner by output in 2017, halted all extraction, grinding and stockpiling of ore in the fourth quarter of 2016 and laid off 300 staff after the original ruling in March of that year.

At the time, local news media quoted the company as saying that environmental damage in the area had been caused by drought rather than extraction operations.

The Maricunga mine accounted for 8 percent of the company’s total gold production in 2015. (Reporting by Fabian Cambero and Aislinn Laing; writing by Dave Sherwood, editing by Jonathan Oatis and G Crosse)

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