Chile orders Lundin mine near sinkhole shut for good

Chile orders definitive closure of Lundin’s mine that caused sinkholeSinkhole at the Alcaparrosa mine in 2022. (Source: SMA.)

Chile’s environmental authority SMA ordered on Thursday the “total and definitive” closure of Lundin Mining’s (TSX: LUN) Alcaparrosa mine after an almost three-year probe into a massive sinkhole near the operation.

The 36-metre-diameter sinkhole more than 60 meters deep appeared in July 2022 in the country’s north. It drew global attention and saw authorities charge Lundin. It suspended operations the same day. 

Lundin also faces a US$3.4-million fine and is being charged with four environmental violations including over-extraction of minerals, unauthorized infrastructure modifications, and other breaches of the project’s environmental permits. Lundin’s local unit, Ojos del Salado, said in a statement that it would review the ruling and determine its nexts steps.

The company has 10 business days to pay the fine or 15 days to appeal the decision before the Environmental Tribunal, the SMA said. 

The regulator head, Marie Claude Plumer, said that Lundin operated in unauthorized sectors up until the Copiapo River aquifer, which allowed more water to infiltrate in and subsequently weaken the rock mass.

“The company caused irreparable environmental damage,” she said. “The rules are clear and must be followed. Companies are fully aware of the conditions under which they are allowed to operate.”

 

Candelaria Mining Complex Lundin Mining
Alcaparrosa is one of two underground mines that make up the Ojos del Salado operation, within the Candelaria complex (pictured here). (Image courtesy of Minera Candelaria.)


Shares in Lundin Mining fell 6¢ to $11.74 apiece in Toronto on Thursday for a market capitalization of $10.2 billion. 

The Toronto-based miner owns 80% of the Ojos del Salado complex, which holds two underground mines: Santos and Alcaparrosa. The remaining 20% is held by Japan’s Sumitomo and its Metal Mining unit.

In 2021, the Ojos del Salado complex produced around 8,700 tonnes of copper. However, Lundin didn’t state Alcaparrosa’s specific contribution. 

Sinkholes are pits that form over areas where water gathers underground without external drainage, causing the water to carve out subterranean caverns.

These cavities also form regularly near old and active mines, where large amounts of rock and ore have been extracted, studies have shown.

Sinkholes often form gradually over many years, but can also open quite suddenly, taking cars, homes and streets down with them.

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