Chile fines Barrick Gold $16m for Pascua-Lama mine

The mine will only be allowed to operate once the problems have been solved

Chilean authorities have fined the world's largest gold mining company, Barrick Gold Corp, more than $16m for environmental offences.

Construction at the Pascua-Lama mine, on the border with Argentina, has been suspended until a system to contain contaminated water is put in place.

The news led to share trading in the Canadian-owned company being halted in New York and Toronto after a sell-off.

But activists complained that the fine was only 0.1% of the total operation.

"The resolution is convenient to the offender, a derisive fine for a company such as Barrick Gold," Greenpeace said on a statement.

Despite criticism, the government said the fine was the highest possible under Chilean law.

'No environmental damage'

The environmental authorities said the mining company committed four "serious" and one "very serious" offences.

The latter was a commitment made by Barrick Gold to put in place water treatment systems to contain contaminated waste water and to prevent rainwater contamination.

The company itself reported its shortcomings to the environmental authorities, which led to an investigation.

Barrick Gold Corp acknowledged the failures and promised to work on solutions.

The fines are related to building and regulatory shortcomings, a company executive said.

"We have not been charged with any environmental damage," the president of Barrick South America, Eduardo Flores Zelaya, told Chilean news website La Tercera.

But the investigation found further problems.

"We found that the acts described weren't correct, truthful or provable. And there were other failures of Pascua-Lama's environmental licence as well," Juan Carlos Monckeberg, Chile's Environment superintendent, told AP news agency.

Among the violations, there was an "unjustified discharge coming from the acid treatment plant to the Estecho river", according to the authorities.

Until all of the government requirements have been fulfilled, the mine will not be allowed to operate, they say.

Barrick's shares have reportedly lost more than half their value in the last year, mostly because of Pascua-Lama's problems.