Anglo American PLC (LSE:AAL) said the Environmental Assessment Service of Chile (SEA) has recommended that the permitting application for the Los Bronces integrated project be rejected, pulling the company’s shares down as much as 7.5%.
The FTSE 100 miner has been engaged in an environmental assessment process for its Los Bronces Integrated Project (LBIP) in Chile since 2019.
Under the LBIP, Anglo is seeking to extend the life of the mine by expanding the current open pit within the Los Bronces' operating site and replace future lower-grade ore by accessing higher-grade ore from a new underground section of the mine.
“The SEA has confirmed that LBIP satisfies all relevant environmental regulation but bases its adverse recommendation on an alleged lack of information during the evaluation process to fully remove any doubts about a potential risk to public health,” Anglo said in a statement.
A decision on the LBIP permit application by the SEA is expected within the next week.
Anglo retained its current copper production guidance in respect of 2022 and 2023, but warned that the guidance remains subject to water availability and the ongoing effects of Covid-19.
The company is not the only miner with problems in Chile.
Last week, Antofagasta PLC (LSE:ANTO) reported a 41% drop in first-quarter copper production partly due to an ongoing drought at its Los Pelambres operations in Chile, while larger rival BHP Ltd cut its copper production target for the year due to problems at its Escondida mine in Chile as a result of Covid, staffing and local public road blockages.
Anglo also reported last week that it had cut full-year production guidance for platinum group metals, iron ore and metallurgical coal.
READ: Anglo American shares fall on production guidance cut and rising costs
Shares in Anglo dropped to 3,202.50 pence, before recovering to trade 6.4% lower at 3,237.50p in early trade.
“In the event of a negative decision from the SEA, the permitting process allows for further review to evaluate the full range of merits of the project alongside the technical permitting considerations,” the company said.
“Anglo American is committed to following the established process and is working with the Chilean authorities to demonstrate that all potential impacts have been fully mitigated and to secure approval for the project.”
The project uses the mine's existing processing facilities, optimises water efficiency, and requires no additional water or tailings storage facilities.
“LBIP represents a significant investment in the future of one of Chile's largest copper mines and is an example of modern mining where the full range of sustainability considerations have been consulted on and designed in from the outset,” Anglo said.