Lundin Gold to pay $2.5m to replace collapsed bridge near Fruta del Norte

18.10.2020, 22:23 - eeppo

Following the collapse on Saturday of a bridge in the town of Los Encuentros in Ecuador’s southern Zamora Chinchipe province, Lundin Gold (TSX: LUG) announced that it will be footing the $2.5 million bill for the replacement.

The structure had been showing signs of weakness in recent years but it completely failed when a truck carrying ore from Lundin’s Fruta del Norte operation was passing through it.

According to local media, the bridge’s deck came off its bases and fell into the Zamora river with the truck on top of it. The driver was able to escape unharmed and no one else was injured.

A drinking water pipe that ran through the bridge was also damaged, which means that nearby communities have been left without access to the resource on top of being uncommunicated. 

In a video statement, Lundin’s vice-president of business sustainability, Nathan Monash, said that the company has been in touch with local authorities to provide support to the communities affected by the incident.

The collapsed bridge near the town of Los Encuentros. (Image courtesy of the Zamora Chinchipe government).

“Back in 2018, Lundin Gold reached an agreement with the Los Encuentros Heritage Defense Committee and the national government in relation to the bridge in the town of Los Encuentros. This agreement included an accord to build a new bridge, which would be used together with the existing bridge based on a technical assessment,” Monash said. “This process has taken longer than expected for different reasons. However, our commitment stands and we are just waiting for authorities to approve it.”

Monash said that the fact that the new bridge will cost $2.5 million was just announced by provincial prefect Cléver Jiménez. He reiterated that the miner will take care of the payments.

“However, it is important to note that the building of a new bridge must be led by the authorities. This is why I want to highlight that we are just waiting for a decision from the Emergency Operations Committee,” the executive said. “They will define, from the technical point of view, what are the next steps.”

Authorities have said that once the declaration of emergency is approved, the legal paperwork to build a new bridge will begin. As soon as these procedures are completed, construction will begin and it is expected to take up to six months. 

Plans are for the new structure to be 115 metres long and allow for up to 48 tonnes in weight. 

For the time being, Lundin has suspended the transport of any material from and to Fruta del Norte and is currently evaluating the possibility of using an alternate route, which would only allow for the transport of up to 25 tonnes of ore. 

Fruta del Norte is Ecuador’s largest gold-silver mine. Lundin officially opened it in November 2019, and the first doré bar was produced on November 16. Production kicked off just two days later.

The operation is expected to produce 4.6 million ounces of gold over a 15-year mine life.