MercoPress. South Atlantic News Agency

Chile/Argentina tax dispute delays gold mine development

Construction of the 2.4 billion US dollars Pascua Lama gold mine has been delayed at least one year due to a tax dispute between Chile and Argentina. The Pascua Lama mine straddles the Chile-Argentine border

The Canadian mining company Barrick Gold Corporation announced in September 2007 that it wanted the mine to be up and running by 2011. However despite investing 200 million US dollars in preliminary construction, the company has not yet been able to start the project because Chile and Argentina cannot agree on how to divide the mine's tax revenues. About 80% of the mine's estimated gold deposits are found beneath 243 hectares located in Chile, while the other 20% of gold deposits are beneath 100 more hectares located on the Argentine side of the border. Chile's Internal Tax Service (SII) said it would be very difficult for authorities to monitor which side of the border the minerals came from. But regional and local governments in both Chile and Argentina are calling for an exact accounting in order to claim their own share of the tax income. Environmental worries, especially about the three nearby ice fields -- Toro I, Toro II and Esperanza -- as well as the concerns of the Huasco community that inhabits the valley, have also delayed construction. Barrick confirmed to The Santiago Times that the mine is expected to last about 20 years and generate 615,000 ounces of gold (about US$526.8 million), 18.2 million ounces of silver (about US$275.7 million), and 5,000 tons of copper (about US$33.32 million) annually. The Santiago Times