Chilean state-owned copper producer Codelco announced Nov. 11 it has reached a preliminary agreement with Chilean state lawyers in a dispute over water extraction.
The deal could unlock a $1.2 billion project to ensure the future of its Salvador division, the mining company said.
If approved by the environmental court for northern Chile, the accord would allow Codelco to resume construction of the Rajo Inca project which aims to increase production at Salvador after existing reserves run out in the coming months.
Construction at the project was halted last July after the autonomous State Defense Council accused the company of causing irreparable environmental damage to Salar de Pedernales, a high-altitude salt-flat.
The project, approved by environmental authorities last February, is reliant on water extracted from wells around the salt-flat where decades of pumping by the company has dried surrounding wetlands, harming flora, fauna and local communities, the lawyers said in their suit before the court
Worried by the impact on investment and jobs as the country recovers from the coronavirus pandemic, the Chilean government has intervened to encourage the two sides to reach a deal.
"The preliminary agreement between the State Defense Council and Codelco is extraordinarily important as it gives significant backing to Rajo Inca....and peace of mind and security to more than 5,000 workers and their families," tweeted Mines Minister Baldo Prokurica.
Details of the agreement would be known once analyzed and evaluated by the three-judge court, Codelco said.
Rajo Inca aims to produce 93,000 mt/year of copper from next year by processing waste material from the existing Indio Muerto pit, extending operations at Salvador by at least four decades.
Last year the mining and smelting complex produced just over 50,000 mt of copper.
