A Chilean court suspended construction of what would be one of the world's biggest gold mines, accepting a complaint filed by indigenous groups on environmental grounds.
The project was launched in 2009 by Canadian mining company Barrick Gold, the world's largest gold producer, after an initial investment of $8 billion.
It plans to spend $8.5 billion more on the unfinished Pascua Lama mine, which straddles the Chile-Argentina border at an altitude of 4,000 meters (13,200 feet), and had hoped to start production next year.
But local groups have launched a legal battle to halt the plan, citing concerns over possible damage to a river and resulting in Tuesday's ruling by the Santiago Appeals Court, which was seen by AFP.
Wednesday's order, which suspends construction of the open-pit mine while the court studies the broader environmental issues, came as crews were still removing earth to create the pit from which gold and silver would be extracted.
The complaint was filed by the indigenous Diaguita people in northern Chile.
It said that the construction work "has generated a situation of imminent environmental danger" for the glacier-fed Estrecho River.
Lorenzo Soto, a lawyer for the native people, said damage being caused by the mine construction was massive.
He said regulators had found that the glaciers at the source of the Estrecho were now covered in dust from the mine excavation, and that Barrick Gold had failed to prevent it as required.
"The glaciers are covered, which generates damage by producing a phenomenon of accelerating melting," Soto said.
Interior Minister Andres Chadwick said he was not surprised by the court decision, and welcomed the idea of suspending the project while Barrick ensures it is complying with all environmental protection terms set by the government.
Barrick Gold said it was suspending work on the Chilean side of the border while it works to satisfy the environmental and regulatory requirements to the satisfaction of the Chilean authorities.
"It is too soon to assess the impact, if there is one, on the budget and calendar of the project," it said.
Construction activities in Argentina, "where the majority of Pascua-Lama's critical infrastructure is located, including the process plant and tailings storage facility," are not affected by the ruling, the company said in a statement.
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