The Gazette (Montreal, Quebec)
September 2, 2003 Tuesday Final Edition

By Michelle Lalonde

HEADLINE:
Noranda puts off aluminum smelter in Chile's Patagonia region: Company cites economic factors but environmentalists claim victory 

Noranda Inc. has put on ice a proposed aluminum smelter in the pristine Patagonia region of Chile, blaming a lack of investors and a prolonged downturn in world aluminum markets.

While Noranda says the decision was purely economic, environmental groups in Canada and Chile claim victory.

They contend the mining and metals giant withdrew the project from Chile's environmental impact assessment process because it could not pass muster.

The $2.75-billion Alumysa project would have made Aysen, a city of 20,000 people in the middle of Patagonia, home to a huge aluminum smelter, plus the three hydroelectric dams and transmission lines required to power it.

A delegation of Chilean activists and politicians travelled to Ottawa and Montreal in March to meet members of Parliament and Noranda union leaders to denounce the project.

Noranda's operations in Quebec include a copper and precious metals refinery in Montreal East, and the Horne copper smelter in Rouyn-Noranda.

"It is a surrender, because Noranda knew the project would be rejected," Fernando Dougnac, a spokesperson for the Aysen Alliance Reserve of Life, said.

Noranda spokesperson Dale Coffin said the project has not been cancelled, but activities related to it have been "temporarily suspended."

"It boils down to the global economy still not being favourable to a lot of base metals, including aluminum," Coffin said.

"We have been working on identifying potential investors (in the Alumysa project) and that has not gone (well)."

The company said the project would have created 8,100 construction jobs and 1,100 permanent jobs in the impoverished region. But critics said more permanent jobs could be created by exploiting the region's potential for ecotourism and fisheries.

"Patagonia is just stunningly beautiful, and to put an aluminum smelter there would totally destroy the environment, the potential for tourism and the salmon fishery," said Mel Quevillon of MiningWatch Canada, an Ottawa watchdog group.

Quevillon said she expects the project to resurface eventually, but believes that opposition from Chilean politicians, the salmon farming industry and environmental groups will grow in the meantime.