Codelco terminated its contract with Canada's SNC-Lavalin Group Inc. as the Chilean miner is accusing the latter of failing to meet obligations under a US$260 million contract, which includes engineering, supply and construction of sulfuric acid plants for the Chuquicamata mine's copper smelting operation, Reuters reported March 25.
SNC-Lavalin won the contract to upgrade the mine in 2012, which was followed by an agreement to build sulfuric acid plants in 2016. Technical issues and rising costs related to the planned upgrades, as well as mass protests, have also hampered development.
SNC-Lavalin chiefly attributed the challenges at the project to unexpected site conditions, environment and safety measures, and underperformance by subcontractors.
Chilean Mining Minister Baldo Prokurica said in a previous Reuters report that Codelco stands to lose more than US$40 million due to delays in a planned smelter restart.