Chilean Mining Giant Codelco Cancels US$260-Million Contract

Chile's mining giant Codelco has canceled a US$260 million contract with Montreal-based engineering company SNC-Lavalin Group Inc., the firm at the heart of Canadian Prime Minister Justin Trudeau's largest political scandal.

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The contract outlined an acid plant construction project in the Chuquicamata mine in Chile. According to Codelco, SNC's continuous and severe breach of contract has caused the project to suffer delays related to construction and quality, and subcontractors have been paid late.

Codelco issued a release stating that it had "made several attempts to resolve the problems facing the project," and that efforts to make a compromise had been attempted up until February.

In response to Codelco's decision, SNC claims to be "appalled" and "surprised".

However, the company has already taken steps to demobilize the construction site and consider the financial consequences of the contract cancelation. SNC also claims that considerable losses were directly attributed to Codelco and inadequate sub-contractors, and announced that it is preparing dispute resolution actions.

SNC has been receiving a lot of media attention ever since Canada's former attorney general accused Justin Trudeau and his inner circle of trying to influence her decision on whether or not to take the company to court for corruption charges.

Codelco, on the other hand, has also been the center of controversy.

Protests have marred the company’s 10-year plan to transform the Chuquicamata copper mine from an open pit to an underground mine.

Several unions have also called the company out for the loss of 1,700 jobs, and inadequate healthcare provisions and retirement options for the majority of the workers.