Barrick’s senior vice-president for Pascua-Lama, Eduardo Flores, has been reassuring people that the company intends to see the project through. Flores, who was appointed days after Chilean courts ordered a halt to work at Pascua-Lama last April, has been making a high-profile effort to explore what went wrong, consulting labour and environmental experts and officials with the agency that handles indigenous affairs. Barrick would not let Flores—or anyone involved with the project—be interviewed for this article. But plenty of other people were eager to talk about it, and to share what they have told Flores.
Not much of it was flattering. In Chile today, you could spend a very long time trying to find anyone with a good word to say about Pascua-Lama. Carmen Bou, as the head of the government in the area, has overseen the distribution of a slice of Barrick’s corporate social responsibility spending here, yet she dodges reporters so determinedly that the scenes resemble a French farce. Local agricultural baron Omar Campillay, who has benefited in several ways from spending by Barrick, declines, in language best described as colourful, to talk about Pascua-Lama. Even the government of Chile, which draws at least half of its export earnings from mining, disparages Pascua-Lama; the country’s president expressed satisfaction when the project ground to a halt.
You have to wonder—how could Barrick spend so much money here and still end up without a friend?
If you ask Luis Baertl, the seeds of Pascua-Lama’s implosion were sown early, as if in a crónica de una muerte anunciada—a chronicle of a death foretold.
Baertl, the garrulous and enthusiastically profane former head of development in Latin America for Barrick, was part of the first team to strike out in the snowdrifts at 5,200 metres. The air was so thin they could hardly breathe, and it was hard to imagine being there for an hour, let alone installing a whole mine camp, he says. But the dimensions of the fat seam of gold beneath the ice and silt seemed to expand with every test drill they sank. And that idea would prove intoxicating: The size and potential wealth of the project infected everyone involved with a giddy sense of exceptionalism that sent conventions and good sense out the window, he says.
Born at the foot of a silver mine in Peru, Baertl has an opinion on most every mine in South America—he scouted half of them in a 30-year career. Barrick recruited him in 1992. His first years with the company were “fantastic,” he recalls over lunch in Santiago, the Chilean capital. He enjoyed flying teams from Bay Street out to trek up hillsides where the soil was tinged with tell-tale red.
With Pascua-Lama, he saw a project that had the potential to be crazy big. The gold reserves, as of the end of 2013, are put at 15 million ounces, compared to total reserves of 104 million ounces across the entire Barrick empire. And this gold mine came with a bonus: It would also be one of the world’s biggest silver mines. The site had significant reserves of copper, too. When the silver revenue was considered, the cost of production per ounce of gold was almost nothing.
The elevation of the deposit was not the only challenge. It also straddled a border: While most of the mine’s pit would be in Chile, 80% of the site, including the processing facilities, would be in Argentina. The two countries have a history of disagreeing about their lengthy border, and the region has a long record of conflict over mineral resources, but Baertl was nevertheless tasked with negotiating the world’s first-ever transnational mine. Apart from security concerns and taxation issues, there were some more prosaic, even petty, conflicts to resolve; the Argentines were aghast at the idea that dirt, good Argentine dirt, might be dumped on the Chilean side, Baertl recalls with a laugh. But he got the deal signed; soon, within the company, they were calling the mountaintop concession The Barrick Republic. (While both governments had sovereignty concerns, the mine’s inaccessibility meant that neither nation would have close scrutiny of what went on there.) Before long, Barrick had exploratory drill teams out on the ice.