Big chill: a gold mine might make engineering history in Chile and Argentina, but protestors are out to block it.

With the discovery of the New World, tales of a resplendent, gilded kingdom, El Dorado, spurred legions of adventurers to set sail. In their sometimes suicidal pursuit of gold, however, Spain's otherwise tough conquistadors would have never considered smashing through a glacier to get to the precious metal.

That's exactly what Canada's Barrick Gold intends to do, nearly 4,800 meters above sea level on the border of Argentina and Chile. Called Pascua Lama, the company's US$1.50 billion gold mine is a colossal engineering task. To get to a 17.5 million-ounce lode of buried gold, the company must remove 10 square hectares of solid ice spread across three glaciers. Using hydraulic-powered machinery, engineers will chisel away at a 33-foot deep glacial wall and then haul away the giant ice cubes in cooled trucks to an adjacent glacier, where they'll be dumped and allowed to fuse back to the ice mass. To refreeze cubes cut away to make room for the mine, snow fences at the glacier's perimeter will hold down seasonal snow pack.

Barrick claims only 1% of the glacier's surface area will be destroyed and insists that the procedure is barely more intrusive than what Mother Nature does to the glaciers already. "Glaciers may be millennial in age, but they haven't remained unchanged all that time," says Vince Borg, Barrick's vice president for communications. If successful, Barrick plans to start production in 2009 and operate the open-pit mine for 21 years.

Barrick wants to begin construction on the mine by year-end, but a last-minute challenge by environmental groups has stalled final regulatory approval. Now the project appears to have lost momentum. The company originally won approval in 2001, after Argentina and Chile signed a treaty regulating cross-border mining activities, such as moving workers, machines and gold back and forth between the two countries.

But the project languished after Argentina's economy imploded, leaving Barrick to focus on its more modest $540 million Veladero project, on an adjacent property in Argentina's San Juan province. By 2004, however, the price of gold had jumped to $460 an ounce--from $255 in 2001--so the company dusted off its Pascua Lama plan. In November, Barrick submitted a revised environmental impact assessment to authorities in Chile, providing an unexpected opening for anti-mine activists.

In May, a regional environmental commission overseeing the project-perhaps bowing to public pressure--asked the company to consider scrapping its plans to move the glaciers and instead run the mine as an underground operation, which would leave the ice intact. Barrick is now studying the request, but the company has said publicly that underground mining is not feasible. Yet Barrick isn't leaving the mine's fate to chance. It began a national television campaign in Chile to highlight the project's economic merits and dispel environmental concerns, insisting the company is pursuing the best practices in the mining industry.

Unconvinced, environmental activists dumped ice blocks outside Barrick's offices in Santiago in April. By June, as news of the project spread through Chile and over the Internet, the fledgling Anti-Pascua Lama Front drew more than 2,000 people to marches near the mine as well as in Santiago and in Europe. They claim that the mine puts at risk water supplies of indigenous farming communities downstream, many of which have depended on the glaciers for centuries to overcome the effects of recurring drought. "The fact the company isn't thinking twice about moving three glaciers tells you how little they worry about the environment," says Cesar Padilla, a researcher at the Observatorio Latinoamericano de Conflictos Ambientales, an environmental group in Santiago.

Padilla claims mining traditionally contributes little to Chile's northern Third Region, where Pascua Lama will operate. Most of the jobs created will be on the Argentine side of the border, he says, while accusing the mining company--which must meet government licensing and taxing requirements--of outright theft. "Is that a fair trade-off for having our glaciers destroyed and minerals stolen?" he says.

Although an effective propaganda tool, glaciers are not the only aspect of the project that worry environmentalists. Potentially more hazardous is Barrick's use of cyanide to extract gold from crushed ore. Barrick plans to store its cyanide-contaminated railings, or waste ore, on the Argentine side of the project in a four-square-kilometer dam lined with plastic. If managed correctly, such structures are virtually harmless. Yet cyanide is not something to be taken lightly. It takes only a teaspoon of 2% cyanide solution to kill an adult.

According to Earthworks, a mining reform group in Washington, D.C., dam ruptures have accounted for 75% of the hundreds of environmental incidents at mines during the past three decades. And Barrick faces accusations of cyanide contamination at its jointly owned Kalgoorlie mine in Australia. At Pascua Lama, Barrick is up against a fresh set of problems, one that has environmentalists on edge--frequent earthquakes.

Cyanide usage may he a necessary evil for processing ore, but it's an increasingly unpopular one. Germany, the Czech Republic, Costa Rica and the U.S. state of Montana have banned the chemical for mineral extraction. In neighboring Argentina, the Patagonian community of Esquel blocked U.S. mining company Meridian Gold from opening a mine partly on cyanide concerns.

Snow white. Barely even a blip on the radar screens of big miners a decade ago, Argentina expects to take more than $5 billion in mining investment over the next few years, almost half of that in San Juan province. The stakes are even higher in Chile, the world's largest copper producer. In the face of a well-oiled anti-mining movement, the country is struggling to burnish its snow-white image as an investor-friendly mining destination.

In May, the Chilean Congress voted to impose for the first time royalties of up to 5% on mining activities. Although passed too late to affect Pascua Lama--which enjoys a pre-existing tax-stabilization accord--debating the law alone was enough to sink the country this year to 14th place on the Fraser Institute's annual survey of mining companies and the investment climate, a review of 64 mining jurisdictions. Chile was once second (the U.S. state of Nevada is No. 1). "Investors were clearly spooked," says Fred McMahon, director of the institute's Center for Trade and Globalization Studies and the survey's author, if Pascua Lama gets mired in politics, investors might reconsider committing the $10 billion the country expects to attract in mining investment through 2008.

In Argentina, Pascua Lama has caused less controversy, despite the mine's location in a United Nations biosphere reserve. That's in part because of strong political support. "Like anywhere, mining generates controversy, but our province is 85% covered by mountains," says Jaime Verde, president of San Juan's Mining Chamber. "Mining is the only future we have."

JOSHUA GOODMAN * BUENOS AIRES