Barrick fined for 
Veladero cyanide spill

BUENOS AIRES, ARGENTINA — Barrick Gold (TSX: ABX; NYSE: ABX) has been fined $9.8 million for a cyanide spill that took place at its Veladero gold mine in Argentina’s San Juan province in September 2015.

A provincial court is also moving forward with criminal charges against nine current and former Barrick employees in connection with the spill.

The accident occurred when a valve failure released solution into the Potrerillos River, a small waterway next to the mine’s leach pad.

Barrick says the solution held freshwater and diluted cyanide.

The Potrerillos River runs alongside the mine and into the Las Taguas River, which flows into the Rio Blanco River. The nearest communities are 150–185 km downstream from the mine.

In a press release on Sept. 30, Barrick estimated that 1,072 cubic metres (1.1 million litres) of the solution entered the river, but that cyanide “made up only a small fraction of the total volume.

“At no time did cyanide levels in the downstream river system, near communities, exceed 0.1 part per million total cyanide — the legal limit for safe drinking water in Argentina, and in line with international standards,” the company stated.

In the days after the Sept. 13 spill, Barrick reported that no cyanide had been detected in the river system downstream from the mine since Sept. 15, and that even though no risks to human health were identified, it provided drinking water to three small communities downstream on the Blanco River.

Barrick ran a water-monitoring program and dispatched a team of leading technical and environmental specialists to help with the response.

Since the spill, Barrick says it has implemented a “comprehensive action plan to strengthen controls and safeguards at the mine, while addressing the causes of the solution release.” Among these actions are intensified water monitoring, adding heat controls and pressure-sensing equipment to manage freezing risks, new procedures related to leach-pad operations and more water management controls.

The company said in its news release on Sept. 30 that while the investigation was ongoing, preliminary results determined that solution from the failed valve entered the mine’s Northern Diversion Channel, next to the heap-leach pad area, and that a gate on the channel was open at the time of the leak “for reasons that are still being investigated.” The open gate helped the solution bypass a containment pond and enter the Potrerillos River.

“We recognize that we have disappointed many of our partners in San Juan province and we deeply regret this incident,” Kelvin Dushnisky, Barrick’s president, said in a March 11 press release announcing the fine.

“Undoubtedly the incident that took place at Veladero has contributed to the loss of social licence,” a representative of the San Juan government said in an interview with The Northern Miner in San Juan on Feb. 25. “We have to rebuild that together, we have to work on that.”

The spokesman, through an interpreter, also said there was room for improvement on how the news was distributed locally, with domestic newspapers such as the Argentina Independent initially reporting that 15,000 litres of cyanide had been spilled, before revising the number to 224,000 litres, and then to more than 1 million litres.

Drilling at the Veladero gold project in Argentina in 2008.  Credit: Barrick Gold

“Probably it was not the best way to communicate it, we all know that,” the official said, who is the former mayor of Sarmiento and an assistant to San Juan Governor Sergio Unac. “But this has to give us a lesson. We’re trying to generate consensus, we’re going to try to create a scenario for dialogue — to create a communication policy not just from government or the mining companies, but about mining activity as a whole.”

Andy Lloyd, Barrick’s senior vice-president of communications, noted that the company was under orders from the Argentine government to estimate how much solution had been released before they could finish their investigation and confirm the amount of solution in the environment.

“The estimates were preliminary, and they were revised,” he told The Northern Miner. “We were required by law to provide those estimates to the authorities … we weren’t providing those estimates to our corporate shareholders until they were more accurate and real.”

“It’s one of the facts that we were criticized for — releasing estimates that were not final,” Lloyd continued. “We were required to provide estimates so we provided them. It was not helpful. In fact, it created an impression that the information was unreliable. When the definitive estimate was available, we posted it on our website.”

Robert Fry, Canada’s ambassador to Argentina, noted that while Barrick “had measures in place and reacted quickly, were proactive in advising local and provincial authorities, and did a good job speaking to the local communities, explaining the problem and taking steps, such as providing a large supply of drinking water as a precaution … even though their testing and analysis indicated there wasn’t a health risk,” there were things that could have been handled better.

“Where there might be some lessons learned, at least for Argentina, was in terms of public communications,” he said in an interview in early March at the Canadian embassy in Buenos Aires. “The facts of what happened changed every day, and that meant the story stayed on the front pages of the national newspapers for a lot longer and made the public question what they were being told. This aside, [Barrick] did a good job overall, and have made important changes since then to improve their operations.”

San Juan is Argentina’s biggest mining province and houses a number of high-profile mineral projects, including Barrick’s Pascua Lama, 10 km from the Veladero mine, McEwen Mining’s (TSX: MUX; NYSE: MUX) Los Azules and Glencore’s (LSE: GLEN) El Pachon. It also holds Yamana Gold’s producing Gualcamayo mine.

Sergio Unac, San Juan’s governor, told The Northern Miner that 70% of the province’s exports are mineral and mining products, and that the mining sector makes up 35% of the province’s gross domestic product (GDP). (Nationally, mining constitutes 1% of GDP.)