Delay in Barrick mine as gold supply lags demand

The development of Pascua Lima, one of the world's last known mega-gold finds, is now being held up by a tax dispute in Argentina.

The project, owned by the world's largest gold producer Barrick, had originally been stalled as a result of environmental and terrain issues.

It is situated on a border between Argentina and Chile on the Andes at 5,500m above sea level and is said to contain some 17 million ounces of gold.

However, a lengthy battle now could be on the cards, which is good news for people investing in gold as output may not increase for some time to come.

The situation is a source of great frustration for Chile, which agreed to the project some months ago.

Chile mine minister Santiago Gonzalez said: "Now it's up to (Argentina's tax) Treaty Commission to call a meeting to discuss and reach a solution.

"We, Chile, as a country, want this project to happen."

While the project may not be shelved altogether, the delay should see supply continue to lag the increased levels of gold buying seen worldwide at present.