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RPT-INTERVIEW-Chile's environment lawyers say they're just warming up

Alexandra Ulmer and Fabian Cambero
Monday, 20 Jan 2014 | 7:09 AM ET

(Repeats Jan 17 article with no changes to text or headline)

* Growing social movements question giant resource investments

* Lawyers say mining to come under increasing fire

* Chile seeks balance between growth, environmental protection

SANTIAGO, Jan 17 (Reuters) - Chile's leading environmental lawyers, who have helped stall around $30 billion in mining and energy projects, say the battle is only just beginning - and copper investments are poised to come under increasing fire this year.

In a significant shift for business-friendly Chile, empowered social groups are successfully suing massive projects over threats to glaciers, health, indigenous rights and biodiversity.

Power projects have so far fared the worse, but Santiago-based lawyers Alvaro Toro and Lorenzo Soto say many communities are now turning up the heat on mining in the world's top copper producer.

"This year is going to be very conflictive," Alvaro Toro, a lawyer with environmental NGO OLCA, told Reuters in his tiny office, just a block from the headquarters of world No.1 copper miner, Codelco.

"Projects are increasingly being set up in fragile places. People's opposition is completely rational," he said on Friday.

Toro's OLCA has successfully led legal cases against a number of high profile projects, including Brazilian businessman Eike Batista's now nixed $5 billion Castilla coal power plant.

Like many of its Latin American peers, resource-dependent Chile is struggling to strike a balance between copper-led economic growth and environmental protection.

At stake is a third of the world's red metal, which avid consumer China is gobbling up as it builds infrastructure for its urbanizing population.

But with copper making up 15 percent of Chile's gross domestic product and mining forecast to rake in $100 billion in investment over the next decade or so, conflicts are set to increase.

"The questioning of big mining is just getting started," said Lorenzo Soto, an independent lawyer, who led the case against global miner Barrick's controversial $8.5 billion Pascua-Lama project.

The environmental regulator suspended the gold mine last year because pre-stripping began before protective infrastructure was finished, threatening local water supply.

COPPER QUESTIONED

As ore grades dwindle in Chile, some miners are eyeing expansion or new projects closer to agricultural strongholds, populated areas and glaciers, sparking conflicts.

"Strong offensives against all of Codelco's divisions are looming," said Soto.

Both lawyers were coy about the cases they are prepping, though mining and water conflicts are high on the agenda.

Soto said he is currently representing an Aymara indigenous group in the Atacama desert that opposes BHP Billiton's Cerro Colorado mine.

Other potentially divisive mining projects may include Teck Resources' Relincho, state miner Codelco's Ventanas refinery, JX Nippon Mining & Metals Corp's Caserones and Chilean Antofagasta Minerals' Pelambres.

Chilean energy company AES Gener's Alto Maipo hydropower project and CCU's planned bottling plant in Paine, on the outskirts of Santiago, could also prove flashpoints.

"I can't absorb all the requests I'm receiving," said Soto. "We haven't reached the peak of the wave yet."

DEEP ROOTS TO LAND CONFLICT

Fuelling the conflict is the fact many Chileans say they have not benefited from the mining boom in the country, where income inequality is steep and power remains largely concentrated in the hands of a few families.

Setbacks to revenue-raising projects are on the rise just as Chileans clamour for improved education, health and pensions, creating a major quandary for center-left president-elect Michelle Bachelet.

Experts say a nebulous regulatory framework has complicated the situation and contributed to project delays, with contradictory rules for example among state institutions about land use planning.

Both lawyers stress they are not out to dogmatically block projects and that economic growth and environmental protection are not mutually exclusive.

"We think there's a point of equilibrium," stressed Soto, framed by posters denouncing coal plants.

But in the meantime, he added, "we have to fight projects that are cheap and polluting."

(Writing by Alexandra Ulmer; Editing by Sophie Hares)