Costa Rica gold mine stalled by environmental claims

Monday, April 26, 2010

SAN JOSE, Costa Rica, April 26

SAN JOSE, Costa Rica, April 26 (Reuters) - Work on Costa Rica's only open-pit gold mine remained stalled amid environmentalists' renewed complaints that the small Canadian mine owner is threatening local plant and animal life.

A court ruled earlier this month that Infinito Gold Ltd could resume work at its Crucitas gold project near the border with Nicaragua after environmental challenges stopped construction on the property in October 2008.

But the victory for the company was brief, since new appeals by Costa Rican environmental groups mean Infinito can not move forward until the legal questions are resolved.

The groups claim clearing trees at the open pit mine will damage the delicate ecosystem around the site, which is home to endangered wildlife.

The company denies the claims but says they will respect the court's decision and no work is currently being done at Crucitas, Andres Soto, a spokesman for Infinito in Costa Rica told Reuters on Monday.

There is no date set for a final ruling on the matter but if the court rules in the company's favor, the mine will start producing gold around nine months later, Soto said.

Crucitas will be Costa Rica's first major gold mine with a capacity to produce 85,000 ounces of gold annually. An investment of up to $66 million is required to start the mine with an indicated resource of 1.2 million ounces of gold, according to the company's website.

Costa Rica is famed for its lush forests that cover half of its territory, but has minimal metallic mineral resources.

President Oscar Arias reversed a moratorium on open pit mining after taking office in 2006 and later declared the Crucitas project of "national interest," angering environmentalists.

Laura Chinchilla, the country's president-elect who will take office in May, is a protege of Arias but she has said she will not allow any new open-pit mine projects in the country. (Reporting by Leslie Josephs; Editing by Marguerita Choy)

Source URL: 
www.reuters.com/article/latestCrisis/idUSN26143116