Chile's supreme court has halted construction on the Rio Cuervo hydroelectric project in the country's remote and pristine Patagonia region, after accepting an appeal from environmental groups.
The court's decision on Friday ran counter to a recommendation by a regional environmental review commission to give the green light to the project, developed by a joint venture of Australia's Origin Energy and Xstrata Copper.
The Rio Cuervo project is part of a larger plan to build three dams with a total capacity of 1,000 megawatts in the area around Aysen.
Environmental groups filed a petition against the scheme, saying it will wreak havoc in the region's unspoiled wilderness.
Chile's high court accepted the appeal and ruled the environmental review board had ignored a recommendation from the national geology and mining service to reject a soil survey done by the joint venture, known as Energia Austral.
The court ordered that a new soil survey be carried out before a new vote on approval of the project.
On Saturday, Energia Austral said it would comply with the court's wishes, noting that "in no way should the court's ruling be understood as a rejection of the project under evaluation."
The separate Hidroaysen project to build another five hydroelectric dams in the Aysen region of Patagonia is already in the final stages of the approval process.
That $3.2 billion initiative, a joint venture of Colbun and Endesa, would generate 2,750 megawatts of electricity, but the dams would flood 14,600 acres (5,900 hectares) of pristine land.
Chile's supreme court has given the green light for that project to go ahead.
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