The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™

Ratings update: Barrick, Argentina

A recent Chilean court order finally draws to a close the saga of Barrick’s cross-border Pascua-Lama project – but the stars may soon align for a simpler Argentina-only development.

Key developments

  • Chile’s environmental court recently approved a January 2018 order by the country’s regulatory authority requiring Barrick to close all surface facilities at the Pascua-Lama project, which straddles the Chile-Argentina border. The original order had set out 33 environmental charges, five of which are sanctionable by total closure. One of these – related to monitoring of glaciers – was confirmed by the court’s recent ruling.
  • Barrick has for some time been exploring alternative options for Pascua-Lama, which has faced a series of controversies and regulatory hurdles. In 2016, it announced a “drastic revision” to the original plans for an open-pit, cross-border project, and began investigating underground options and the possibility of a phased project starting on the Argentina (‘Lama’) side. Pre-feasibility studies on an underground cross-border development were halted in April 2018, with the company citing its investment criteria and “other risk factors”.
  • Developing Lama without Chile’s Pascua – at least for now – is increasingly looking the likeliest way forward, though Argentina holds only around 20% of the total deposit. This model could take advantage of planned – though as yet unrealised – improvements in the investment climate under Argentina’s President Mauricio Macri. Barrick has been strengthening its relationship with China’s Shandong Gold, its joint-venture partner at the nearby Veladero mine in Argentina, which is analysing the potential for synergies between the assets.


  • The travails of Pascua-Lama illustrate the license-to-operate challenges of developing a cross-border project. It was made feasible by a bilateral Chile-Argentina treaty in 1997 which allowed for the first time cross-border exploitation of mineral deposits. However, in spite of the predicted benefits from the mine – including some 5,500+ jobs during construction and 1,600+ jobs during production phase – the two governments later argued over distribution of taxes from the mine, resulting in substantial delays.
  • Barrick has also had to contend with public and government concerns in both countries over the environmental impacts, particularly on water sources and glaciers, and has faced local and international campaigns against the project since 2005. In 2013, Chile’s regulator ordered a halt to construction over alleged environmental violations. Barrick later shelved the project amid huge cost overruns and a declining gold price.
  • If Barrick definitively opts for a Lama-only development following the recent ruling, there may be reasons to hope for smoother progress. Authorities on the Argentinian side – especially in the San Juan province – have been significantly more supportive of development (in part because potential negative impacts would have been concentrated in Chile). At the national level, Argentina’s President Macri since 2015 has been pushing to attract mining investment, in contrast to his left-wing nationalist predecessor, Cristina Fernández de Kirchner.
  • Barrick itself may also be better positioned to develop the project following the merger with Randgold. It is planning a dedicated Latin America division to focus in part “on bringing to account and dealing with the challenges around Pascua-Lama”. Mark Bristow, who will be CEO of the merged company, built a reputation at Randgold for his relationship-building skills which have brought success at projects in Africa and could help Barrick navigate the stakeholder challenges in South America.
  • Nonetheless, the future for Lama remains uncertain. Concerns over President Macri’s longevity and the prospects for his mining reforms have deterred mining majors from investing to date. He is facing an economic crisis and controversy over his request for an IMF rescue package; recent emergency measures have included an export tax on minerals. An economic turnaround and election to a second term in 2019 – probably against a resurgent left-leaning opposition – are needed before industry confidence is likely to return.
  • Meanwhile, the capability of the merged Barrick-Randgold management team is still to be demonstrated. There are likely to be challenges in combining two different cultures, establishing a working relationship between the forceful characters at the head of each company, and transferring the stakeholder expertise that Randgold demonstrated in Africa to the very different context of Latin America.


This article uses Critical Resource’s LicenseSecure™ model to assess the likely level of political and stakeholder risk. Our updates provide a rapid overview of new or updated ratings in our database, with a focus on projects in the news. Please note that these ratings updates are provisional, based in part on open source analysis and are not from client projects. Full LicenseSecure analyses are in-depth, involve extensive intelligence gathering and are confidential.

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