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Padre Nelson Barrientos worries that a big mining project will only exacerbate disparity in the Huasco River valley. (Roger LeMoyne/Michener-Deacon Fellowship/Report on Business magazine)
Padre Nelson Barrientos worries that a big mining project will only exacerbate disparity in the Huasco River valley. (Roger LeMoyne/Michener-Deacon Fellowship/Report on Business magazine)

Behind Barrick's Pascua-Lama meltdown in the Atacama desert Add to ...

In the violet light of a February Sunday afternoon, Padre Nelson Barrientos led his flock along the road that winds up Chile’s Huasco River Valley. The congregation of Our Lady of Lourdes of Conay was conveying a new statue of the Blessed Virgin to its home in the parish church, nestled in the shadow of the Andes. A half-dozen young people in traditional indigenous costumes—feathers, beads—drummed and danced, and their parents and neighbours followed in the procession. The mayor, Carmen Bou, was there, walking arm-in-arm at the front with Alicia Páez Campillay, the wife of the man whom everyone calls the valley’s richest businessman. Many of the other marchers wore jeans and work shirts that hinted at a life spent in vineyards and orchards. Making their way to the village, the mayor, the dancers, their parents and the priest scrabbled up the loose gravel of the hillside, past a road sign almost swallowed by shrubbery, pointing up the mountain. On it, faintly visible despite someone’s best efforts with a can of spray paint, were the words “Pascua Lama.”

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The Virgin was installed in the tiny blue chapel. There was dancing, poems, and an offering of the valley’s fat green grapes. As dusk fell, the white-haired priest tugged off a sweaty cassock; he, too, wore a plaid shirt and jeans. He had celebrated Mass in five different places in the valley so far that day, and he was tired. But it does not take much to get Padre Barrientos talking. “There’s no hunger in the valley, thanks be to God,” he says. “But there’s a lot of injustice. Our problem here is justice.”

The priest gestured up the hill with his chin as he spoke—a habit many people in the valley share, a physical shorthand when they are talking about Barrick Gold’s Pascua-Lama mine. Padre Barrientos believes the mining industry is the root cause of the inequality he sees as his work. The church, he says, can only be on the side of the weak, of the people, in this fight. “We don’t have hunger, but we don’t have education, either.”

He looked toward the end of the courtyard. Mayor Bou was sitting on a bench there, deep in conversation with Paez Campillay, the landowner’s wife. As the young people started to take off their feathers, the mayor leapt up and headed for her chauffeur-driven SUV. Everyone relaxed visibly as she was driven away.

It has been 20 years since the start of Barrick’s quest to build a mine here, up at glacier level on the border with Argentina. The company has yet to dig an ounce of gold, but Pascua-Lama has nevertheless had a huge impact on the valley, an oasis in the Atacama Desert: It has brought new resources, and new threats. New alliances have formed, and also new fault lines—the kind of change that most always happens when a big company moves into a small place. But it has taken so long to build this mine that there is a new twist in this old story: The company may have changed the valley, but the valley has changed the company even more.

Barrick made a formal decision to put the mine on hold last October—work is suspended until it resolves a tangle of permitting problems with the Chilean government. That decision marked the end of an era at one of Canada’s few global companies. Starting with a single Ontario mine, founder Peter Munk always envisioned that he would build Barrick into the world’s biggest gold miner. He achieved that goal, buying up other mining companies, big and small, and the overseas operations that came with them.

Some of those projects, in extremely poor countries such as Tanzania, have been rife with social-licence problems. Gold prices have also done the company no favours in recent years; and it grossly overpaid for Equinox Minerals. But in the end, it was Pascua-Lama, whose cost soared to above $8 billion from $1.5 billion in 2004, that brought Barrick’s crisis to a head, checking the company’s expansion and inducing a sweeping set of changes: concessions to shareholders on corporate governance, a dividend cut and a writedown of $6 billion on Pascua-Lama (all currency in U.S. dollars). The overhaul coincided with the resignation of Munk as chairman. The company’s stock languishes far below the lofty valuations it enjoyed prior to 2012.

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?

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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.

Baertl left the company in 1999—amicably, he says—when Pascua-Lama was still in the permitting process in both Chile and Argentina. But even then, the project was in disarray, he recalls: Managers on both sides of the border were running their own shows, not talking to each other. No one at Barrick headquarters in Toronto seemed to know what was happening on the ground, he says. A heady atmosphere prevailed. “We were in the spirit of purchasing the world. ‘We’re going to be the largest company in the world. We’re taking over this, we’re taking over that—we’re doing everything. We’re buying Africa!’” The people in charge in South America were on unfamiliar ground, but they rarely deferred to local expertise. “It was pure arrogance.” Baertl describes a flurry of plans that struck him as crazy extravagances—for trucks with pressurized cabins and specially modified aircraft that could land as high as 4,200 metres.

The situation on the mountain did not, by all accounts, improve as time went on. It took Barrick until 2006 to obtain environmental approvals for the project. And it took another three years for the finalization of agreements about the mine between Chile and Argentina (taxation of the project was the major sticking point). In 2009, Barrick was finally able to give the project a definitive green light and start construction. But now the company made a decision that baffled industry veterans: Although the sky-high mine presented a host of unusual challenges and although Barrick, a company that grew by buying other miners, had never built a mine from scratch in-house, it opted to develop Pascua-Lama itself. That flew in the face of conventional industry wisdom, which holds that junior miners take the risks on a challenging project, and then are rewarded with a big payday when a major buys them out. Instead, as Barrick fumbled in the thin air of this new territory, the budget forecast was revised up, and then up again; the production date was continually pushed back. (In a 2012 conference call, CEO Jamie Sokalsky admitted that the in-house construction team was not up to the job, but also blamed inflation and low contractor productivity.)

Jaime Herrera, regional director for the Atacama with the National Geology and Mining Service, the government’s supervisory agency, watched it all play out, bemused. “The first builder they sent didn’t know about mines. They didn’t know what they were doing. The hierarchy was steep between the people building and the people in charge. The waste heap was in the line of the first snow”—meaning naturally occurring acid in the rock was going to run downhill with the melt. “There were a lot of gringos taking care of business. That was a big problem. They were people who didn’t know about the area, or mining. So much money was being spent, being wasted, and we really can’t imagine on what.”

Herrera had monitored other Barrick projects, such as the gold mine at El Indio further down the Atacama—that one, he said, was “a model.” But Pascua-Lama was a constant headache: In his airy office in a colonial building in the regional business centre, Copiapó, Herrera has accrued a thick file of suspension orders and investigations relating to the mine. He says his team was exasperated by what it perceived as Barrick’s continuous efforts to evade the most basic monitoring at Pascua-Lama. Because the mine spans two national territories, inspections had to be booked in advance, he says. Then an inspector had to undergo a medical exam before being allowed up to 5,200 metres, and often waited hours for the Barrick-authorized trip up the mountain (Barrick, which controls the road up to the mine, would not allow Report on Business magazine near the site). To Herrera, there was a question of whether the standard spontaneous inspection was possible. “The inspector would go there and wait two hours at the door and then drive at 40 kilometres an hour up that road. And in four hours you can hide a lot of things.” None of it sat right with him.

Barrick’s spokesperson in Toronto, Andy Lloyd, says that regulators have “full and unobstructed access to the site” and that 12 different regulatory authorities from the Chilean side alone have made frequent spontaneous inspections.

Things came to a head in October, 2012, when Herrera ordered all work at the site stopped over concerns about excessive dust endangering the health of workers. When he signed the order, he envisioned a temporary suspension, while the company improved standards. Instead, it became the first in a series of disruptions that would bring work at Pascua-Lama grinding to a halt.

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Pascua-Lama is a gold mine, but in truth it is another precious resource—water—that has shaped its story. Water is an emotional issue in the Atacama, the driest desert on Earth. The mine sits atop a mountain covered in pale brown dirt, with barely a shrub on its steep sides. But two fast streams run down from the peak, feeding into the wide, shallow ribbon of the Huasco River, which winds agate-green along the valley floor. In a monochromic landscape, the area around the town of Alto del Carmen, in the heart of the valley, can seem like a mirage. The ribbon of trees and feathery grasses that line the riverbanks, the blocks of grapevines and fruit trees, are all hard to credit in the otherwise forsaken landscape. Water is treasured here, imbued with spiritual significance by the indigenous people, and shared through elaborate and age-old community schemes.

But gold mining is a water-intensive industry, reliant on chemicals including cyanide that can end up lacing a mine’s waste water. To obtain its permit, Barrick had to demonstrate how it would keep that water safe: by processing on the Argentine side, where water scarcity was less of an issue; by building a canal system to divert glacial runoff, groundwater and precipitation around the pit and slag heap, keeping the water free of any of the natural acidity in the rock; by extracting ore in a closed-loop process that would destroy cyanide. Any water (whether precipitation or groundwater) that did come into contact with the mine would be treated before being used in mining operations. But Barrick’s glossy brochures explaining all this don’t seem to have reassured many people in the valley. From the outset, they worried that the river might be poisoned, or run dry.

It was Barrick’s bad luck to be trying to put a gold mine in a place where most people didn’t have a lot of money—and didn’t much care. People who live in Alto del Carmen, in simple one-storey houses, with a lone café facing the church across a shady town square, think of it as a rare and special place. In other environments where Barrick has built or operated mines—in the mountains of Peru, for example, or rural Tanzania—it has found a population hungry for jobs and anything else the company promises. In Alto del Carmen, people were glad to have the new opportunities that might come with the mine—but not at the cost of their current way of life, or their water. “People here have a strong relationship with their land—the people don’t want to work in mining, they work their land,” explains Jorge Villar, the town’s administrator. A former finance manager, he moved to the valley a few years ago, drawn by its hypnotic landscape and the peaceful life it offered. In Pascua-Lama, he saw potential jobs and revenue for the town. But most of his new neighbours, he soon realized, did not. “They’re not interested in the mining company offering them big salaries. Because if you change their way of life and their environment, what are they going to offer their children and their grandchildren?”

Barrick couldn’t help the fact that the people of the valley liked life as it was, but it didn’t make its own task any easier. In 2000-’01, years before the project had its permits, the company improved and extended a road to Pascua-Lama that allowed it to bypass the settlements in the valley. The road ran over streams, recalls René Barra, a manager for CONADI, Chile’s agency for indigenous people. In a place where people are worried about water, this first contact with a company that seemed aloof made many mistrustful.

Meanwhile, it turned out that The Barrick Republic didn’t exist only on the mountaintop. Barrick did most of its hiring—at its peak, the project employed 15,000, albeit only 2,900 on the Chilean side—from outside the valley. Barrick spokesperson Lloyd says many skills that the mine needs were not available locally, and the company has responded by supporting training programs.

More aggressive outreach is likely needed. Barra des-cribes sitting in Alto del Carmen’s one café, where most of the town passes in the course of a day, and seeing Barrick’s community relations staff come in for lunch, sit at a table by themselves, eat and leave again, all without speaking to anyone but each other.

Barrick did make a few key friends, however: In 2006, the company agreed to pay $60 million over 20 years to improve water infrastructure. This program is managed by Barrick, local authorities and the Junta de Vigilancia, the organization that has long managed water here. The junta is set up so that everyone—including the farmers with the smallest plots—has a share, and the number of shares depends on how much water a user consumes. But only the big producers were in on the deal with Barrick; farmers working small plots of land heard about it after it was signed. Chile’s national water administrator declared the deal unacceptable. But it stood, since the water administrator did not have the power to refer the issue to the courts.

The Barrick money went to projects such as building roads and a dam. But those projects are of much greater value to the industrial farmers than they are to the people with a half-acre plot, explains Lucio Cuenca, director of the Latin American Observatory for Environmental Conflict. The handful of signatories benefited in other ways, too: Construction contracts for the dam and the new roads, for example, went to companies owned by Omar Campillay, the valley’s most powerful farmer. In fact, Campillay is widely seen here as Barrick’s ally: Valley people say he has been snapping up farms in recent years, and with them more water rights and votes at the junta. He refused to discuss any of this with Report on Business magazine.

The water deal made a lot of people angry, and so did the perception that the municipality (there is a council, but the mayor has the bulk of power) was allied with the company. Barrick has to date spent $6.2 million of a $10-million development fund that it manages itself. Another $1.5 million has been spent in the last three years by the company, on initiatives such as a scholarship fund administered through the mayor’s office.

Mayor Bou, who also refused to talk to reporters, is seen by many locals as being a champion of the company. The mayor who preceded her was a former Barrick employee. “All the elections have been controversial,” Cuenca says. “Because the electoral universe is very small, and so it’s easily influenced.”

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And then there was the issue of the glaciers. The ice on the mountaintop is seen by the people in the valley below as a sort of timeless reservoir, holding water in its heart that it releases in the hottest, driest years. That matters to people like Maglene Campillay (no relation to Omar Campillay, the fruit magnate). She grows avocados and pears on a small riverfront farm; she irrigates it by lifting a flap on the intricate valley canal system and letting the water pour over her land. “We know in the valley there are good years and bad years of rain,” explains Campillay, round-faced and soft-spoken at 60. “But even in the worst years, when there is drought, the glaciers keep the rivers flowing.”

That, it turns out, is not entirely true. The leading expert on the Atacama’s glaciers, Andrés Rivera, says they contribute minimally to the water system—as little as 0.1%. But for people in the valley, the issue is more emotional than scientific, and Barrick has done little to soothe the disquiet.

In a 2001 plan, the company acknowledged the presence of two glaciers and three “glacierets”—pieces of ice that do not “flow” the way a true glacier does—on the mine site, and said it was going to “move” the glacierets, each about the size of two football fields, by breaking them up and transporting the chunks by truck to deposit them on another glacier. This kind of work is not unheard of in Chile’s mining industry; two projects currently in construction on the outskirts of Santiago involve destruction of ice fields.

By about 2004, the scheme to break up and move the ice was no longer publicly acceptable. In the next iteration of the mine plan, Barrick said it would leave the glacierets alone, while the impact of the mine on the largest ice field in its area would be monitored by Andrés Rivera and his team at Chile’s Centro de Estudios Científicos.

But for the past five years, Chile has been in the grip of a fierce drought, and the lack of rain heightened tensions about the glaciers. The drought has been bad everywhere, but it was critical for the farmers such as Maglene Campillay, who says she has seen her production drop by four-fifths. She and her neighbours came to believe the mine was destroying the glaciers, and with them, their livelihoods. “This time, in the middle of the drought, it seemed that the glaciers didn’t have [their] power any more,” she says. They released no water from their frozen hearts. “The rivers are like the veins in our body. If one dries out, other places dry out too.” Work on the mountaintop was churning up dark dust that settled on the glacier and drew sunlight that quickened melting, the theory goes; then the unseasonal melt was not replenished, because of the drought. And the rivers shrank further.

Meanwhile, despite Barrick’s commitment not to destroy the ice fields, at least one worker at the mine was talking about damage to the glaciers. “I took a three-month course to join Barrick, and in that class they told us, ‘There will be glaciers up there, and you can’t touch them,’” says Claudio Paez, a heavy-equipment operator laid off from Pascua-Lama in 2011. “But the first order we got when we were sent there, was ‘Break the glaciers.’” In February, he testified to a Chilean environmental authority about the partial destruction of a glacier, as part of the work to build the canals to divert water. He used dynamite for the job, he says during an interview.

The story has not been independently verified. But as it spread in the valley, trust in Barrick eroded. A rumour has it that Barrick keeps an airplane on the mountaintop so the company can destroy any clouds that might be formed by the government’s cloud-seeding anti-drought project. Barrick doesn’t want it to rain, the story goes, lest contaminants be washed into the river system—so the company won’t let anyone else have rain either. It is a crazy notion—and so low was faith in the company that a great many people in the valley believe it.

According to Andrés Rivera, the glaciologist, all glaciers in Chile are shrinking, due to the drought from the El Niño cycle and climate change. The glaciers of Pascua-Lama—which he calls “the most-studied ice in the southern hemisphere”—are melting no faster than any others. “In our monitoring program, we haven’t detected a significant difference in behaviour between these glaciers [and others],” Rivera says. “All studied ice bodies are mainly responding to natural variability and not to the possible impacts of mining activities.” About the supposed dynamiting of ice, he says, “I don’t have evidence of these destructive activities.” Barrick’s Andy Lloyd says Paez’s allegations about dynamiting the ice are “completely false.”

But in the valley, many people dismiss Rivera’s work because Barrick is paying for it. They are convinced that glaciers are key to their survival, and the mine is destroying them. And so when activity on the mountaintop was suddenly forced into public scrutiny, Barrick found itself making explanations to a hostile audience.

The environmental licence for the mine obligated Barrick to construct the water management system before it broke any ground. But a year before, Barrick had begun pre-stripping—removing the top layer of fine rock and dirt that lay over the area where the pit would be—even though the water system was only partially finished. In that state, it wasn’t ready to handle a big melt. On Jan. 22, 2013, a key part of the canal system collapsed.

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In another place, Barrick might have been able to tidy up the water system, make an apology, and power through. Even in the Chile the company bought into back in 1994, that might have been enough. Back then, Chile was shakily emerging from decades of military dictatorship. Its economy had outstripped most of its neighbours’, thanks to the aggressive pro-market views of General Augusto Pinochet. By the time he was forced from power, Chile had the best reputation in Latin America for ease of doing business and low corruption, and was on its way to middle-income status. But its newly revived public institutions, including the courts, were weak.

The return to democracy brought a centre-left coalition called the Concertación into power, and it began to push a new focus on health, education and human rights. In 1993, just before Barrick arrived, Chile formally recognized the existence of its indigenous people, and granted some basic native rights. Over time, a cautious new movement began to grow, as communities stepped forward to seek recognition of their indigenous status. They were led by the largest group, the Mapuche, who pushed for rights to what they say is their ancestral land, now occupied by agribusiness. Indigenous issues became a hot political topic.

In 2008, during the Socialist Party leader Michele Bachelet’s first term as president, she oversaw the ratification of the International Labour Organization’s Convention 169, which mandates consultation with indigenous people on all developments that affect them. While the accord is not well-known internationally, Chile’s indigenous people took it to heart, and they began to explore how they might use it to press their own government for rights.

The courts were the obvious route. Thanks to a wave of judicial activism, the indigenous cases found a far more positive reception than they might have even a few years earlier. The change was paralleled on the environmental front, with new legislation and new monitoring agencies. Left-leaning judges were making unprecedented rulings, counteracting what they saw as excessively pro-business policy from government. The legal landscape changed quickly: A series of dramatic rulings over the last eight years has paralyzed an estimated $50-billion worth of infrastructure and industrial projects.

Much of that change was driven by the work of a young lawyer named Lorenzo Soto. He graduated from law school in 1996 with a keen interest in human rights—but the country’s recent history had produced a glut of experts in the field. Instead, he seized on the largely unexplored field of environmental law, and began to carve out a new expertise. He built up a practice, working from a messy office in Santiago, using a bulldog style at odds with Chile’s mannerly society. Working for a percentage of any payout, he aimed big—outlandishly big, in the opinion of many Chileans. In 2004, for example, he won a major settlement for a pair of indigenous sisters whose ancestral land was flooded for a dam; and in 2011, he succeeded in stopping the expansion of a $5-billion thermal power plant, on the grounds that it imperilled the livelihood of a small group of fishers.

At a congressional hearing in 2012, Soto chanced to meet the farmer Maglene Campillay. Six years earlier, just as Barrick received its environmental approvals, Chile recognized the Diaguita as an indigenous people. With that status, Campillay and 3,000 other Diaguita people living near Pascua-Lama were subscribed in the new national approach to native rights.

On the day Soto met Campillay, she and other Diaguita were taking their complaints about Barrick’s effect on local water to Congress. But Soto was startled to learn that the Diaguita had not gone to court to try to stop the mine. They told him the project already had a licence and had been under way for years—they did not believe they could derail it. Nonsense, he replied, and he launched a legal challenge that the great majority of local Diaguita groups joined—with the understanding he would try to stop the mine, or if he could not do that, get them a settlement.

Soto went first to the regional court in Copiapó, and initially he met with a cool reception. But then came the January, 2013, collapse of part of the canal system at Pascua-Lama, which drew the scrutiny of Chile’s newly created Superintendencia del Medio Ambiente, or Environmental Superintendency. It laid 25 separate charges, including ones for faulty construction of the perimeter channels, and failure to both build an adequate water treatment system and to fulfill the mine’s glacier monitoring plan. (It also imposed $16 million in fines, which were later overturned for procedural reasons.) Barrick, defending itself against the charges, insisted that there had been no contamination, but did not contest the accusation that it had begun to move earth before the water system was completed.

Armed with the environmental charges, Soto took the case back to the regional court. In the valley, people were convinced that the mining company had poisoned their water, causing their animals to die and their crops to wither. The court found no evidence of this, but it didn’t matter: Barrick had indisputably violated the rules, and that would no longer be tolerated. The then-president, Sebastian Piñera, told reporters that he had looked at the rulings and the environmental permits and asked himself, “How could they not anticipate all these problems? You don’t leave things for tomorrow.” Such an attitude was not acceptable. “Pascua-Lama must comply with the requirements we’ve set forth and cannot resume work until it does.” In its April, 2013, decision, the regional court ordered the suspension of the mine operation.

Then, in August, the Supreme Court agreed to hear an appeal Soto had filed, and ordered the suspension of the environmental permit. It was less than the total cancellation of the mine of which Campillay and her fellow activists had been dreaming, but it was still a momentous decision. Soto chuckles as he recalls the September day the verdict came. “I was stunned to win. All of Chile was stunned.”

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In the shiny office towers of Santiago where Chile’s mining companies are headquartered, there is widespread speculation that Barrick will sell Pascua-Lama, or at least bring on a partner, probably a Chinese one. In January, CEO Jamie Sokalsky told a mining conference the company was shifting formally to a “maintenance operation,” awaiting higher metals prices and resolution of its permit woes. Workers on both the Argentine and Chilean sides have been fired or laid off. Sokalsky confirmed in his speech that the company was actively searching for a development partner.

For Peter Munk, Pascua-Lama has become an albatross, a tainted capstone to his career. “That is such a major fiasco,” he said of Pascua-Lama in a startlingly frank interview with The Globe and Mail’s Rachelle Younglai late in 2013. “I couldn’t believe that this was happening in our company,” he said regarding the project’s cost overruns. “It was the most unbelievable event,” he said. “…When you have the most sophisticated people and you’ve got unlimited financial resources and top management? How could that happen? It was incomprehensible to me.”

While metals prices are out of Barrick’s control, the situation on the ground in Chile is not. (While most of the construction for Pascua-Lama is in Argentina, that country, with inflation at 25% and the economy in free fall, is desperate to see Pascua-Lama happen—for the jobs, the royalties and the perception of progress.) If Barrick is to keep the project alive, it must win back the community, as Eduardo Flores, its local chief, has said he is at pains to do.

Only one group of the Diaguita unilaterally rules out the idea of a settlement, and most are willing to discuss it, in part because they know that the 1993 indigenous peoples’ law does not give them a veto, and Barrick may well be able to push the project through eventually.

“Sooner or later, Barrick or some other company will work this mine: Gold doesn’t go to waste,” says Maglene Campillay, as she watches the mountain recede back into purple in the dusk. “If there was the possibility that the environment wouldn’t be harmed, that our river wasn’t harmed, the water wasn’t poisoned, that we had water, that our animals could grow, that our fruit could grow big, and that our children could still swim in the river the way they used to, and also that there was growth in the valley, that the community could see direct benefits, that it was not just a marketing ploy—that anyone going to the valley could see it has prospered because of the mine. ...Then why would we fight?”

But that’s not how things stand. “Now, we have to take our time, set aside real, important things we could be doing, to go to court, to hire lawyers, to make money so we can pay them, and we are leaving behind things that are important to us.”

She stops, after an uncharacteristic burst of speech. If that’s what it takes, she says with a shrug, then that is what they will do.

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