Plans for Chile and Argentina's first shared mining project has hit a two-year delay as Argentinean President Cristina Fernández neglected to approve Chile's tax revenue distribution proposals, Chilean daily El Mercurio reported Monday.
Chile modified its tax distribution proposal in June in Argentina's favor as a solution to the split, but Argentina still found the deal insufficient. Since Argentina is confronting agriculture strikes and fighting tax battles within its own country, the Fernández government has put the proposal aside and dialogue between trans-Andean authorities has been shut off.
As several other million-dollar projects are collecting dust within the Bi-national Commission for the Mining Deal, authorities stress that the resolution to the Pascua Lama mine is important in order for other bi-national projects to proceed.
More than 17 million ounces of gold, as well as silver and copper deposits, sit in the mine-to-be of Canadian driller Barrick Gold, who had hoped to begin a US$3 billion mine construction in September (ST May 19). But delays in the tax revenue allocation plan, various sector permits pending in Argentina and resurfacing environmental contamination concerns (ST May 8) have pushed construction plans back two years.
If Pascua Lama is constructed, Chile's second largest gold source would produce 600,000 ounces of gold and 23 million ounces of silver a year, as well as smaller quantities of copper. The mine's tax revenues would be expected to sum up to US$7 billion in total (ST Sept 12, 2007).
SOURCE: EL MERCURIO