Barrick Gold

The Supreme Court of Chile has upheld an environmental permit for Barrick Gold Corp.’s troubled Pascua-Lama mining project, on the condition that a satisfactory water management system is built.

An indigenous community living below the $8.5 billion (U.S.) project had asked the court to revoke Barrick’s licence and require the gold miner to prepare a new environmental impact study.

The court stopped short of ordering a re-evaluation, but said construction must be suspended until Barrick’s environmental commitments and work to protect the water systems is completed.

Barrick issued a statement Thursday saying the company “is pleased that the ruling allows the project to advance in compliance with all legal and regulatory requirements.”

“Barrick has submitted a plan to Chilean regulatory authorities which estimates completion of the water management system by the end of 2014. The estimated timeframe for completion of these works is dependent on regulatory approval of specific permit applications,” the company said.

Earlier this year, Chile’s environmental watchdog agency ordered construction stopped until Barrick builds systems to prevent contamination of the watershed below.

“The fact that the Supreme Court ratified the suspension of the project is important, valuable and satisfactory to us,” Lorenzo Soto, who represents about 550 Diaguita Indians, told The Associated Press on Wednesday.

“We disagree with the court, however, because it didn’t allow for our request to annul the project’s environmental permit,” Soto said.

The mine on the border between Chile and Argentina was initially expected to be producing gold and silver by the second half of 2014, but the company now targets production by mid-2016.

While Argentine officials are eager to keep building, most of the estimated 18 million ounces of gold and 676 million ounces of silver are buried on the Chilean side.

On the Argentine side, where Barrick fuels a third of San Juan province’s economy, officials have been watching closely and trying to figure out how to preserve thousands of jobs.