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Chile environmental regulator files charges against Lundin’s Candelaria mine

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Chile’s environmental regulator SMA filed on Tuesday six charges against Lundin Mining’s (TSX: LUN) Candelaria copper mine for a series of irregularities related to the company’s operational plan to 2030.

The watchdog said three of the infractions were “minor” and the other three “grave”. They range from exceeding the limit of emissions related to liquid industrial waste to infringing provisions outlined in the mine’s environmental qualification, or RCA for its initials in Spanish.

Among the most important violations, SMA found the mine’s used more explosives than allowed between August 2019 and April 2020. This, the regulator said, caused an increase in the total emissions generated by the company, which could have risked the health of locals.

Among the most important violations, SMA found the mine’s used more explosives than allowed between August 2019 and April 2020. This, the regulator said, caused an increase in the total emissions generated by the company.

Another serious charge is linked to the miner’s failure to comply with its commitment of reducing the consumption of fresh water, leading to a loss of underground water at Copiapó river’s aquifer — an area known for its water scarcity.

The SMA said the company could be subject to a fine of up to about $23 millions, the revocation of its environmental credentials (RCA) or the project’s closure.

Lundin now has 10 business days to present evidence of compliance Program and 15 business days to dispute the charges.

Last month, Lundin announced a 14% drop in copper output at the mine.

Full-year guidance has been reduced from 155,000 to 150,000 tonnes copper and from 90,000 to 85,000 ounces of gold, compared with between 172,000 to 182,000 tonnes copper and 95,000 to 100,000 ounces of gold expected previously.

Candelaria produced 34,203 tonnes of copper and about 21,000 ounces of gold in concentrate on a 100% basis in the March quarter. While mill throughput was higher than the prior-year quarter, copper output was lower due to planned lower grades in the most recent quarter.

The complex is indirectly owned by Lundin Mining (80%) and Sumitomo (20%), with the Toronto-based miner acquiring its ownership from Freeport-McMoRan in 2014.

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