Antofagasta warns Los Pelambres mine at risk after Chile ruling

SANTIAGO, March 9 (Reuters) - Antofagasta PLC (Other OTC: ANFGF - news) 's Los Pelambres copper mine said it would immediately appeal a Chilean court ruling on Monday that it should demolish a waste deposit tank, saying that such a move would put operations and the environment at risk.

A judge at the local Los Vilos tribunal ordered that the mine knock down the tank, according to local media and a Twitter account by a protest group from the nearby community of Caimanes.

Protestors claim that the tank has diverted the course of a local estuary, causing water shortages at a time of drought in the region.

Over the last week, they have blocked access to the mine, forcing Antofagasta, a FTSE-100 listed copper giant controlled by Chile's wealthy Luksic family, to cut its output from the project by around 5,000 tonnes.

But Los Pelambres said its proposed plan of works for the project was sufficient to guarantee that water would flow from the estuary to Caimanes.

"Demolishing the wall of the tank, which was authorized in accordance with our environmental legislation and complies with all the norms for its correct operation, would provoke great damage to the Caimanes community and the environment," said Los Pelambres in a statement on Monday.

"It would also imply the suspension of operations."

Antofagasta Chief Executive Diego Hernandez said the company would do "everything necessary legally" to ensure the mine operations continued.

It would not be the first casualty of the drought, in which one of the driest Januarys on record has capped several years of below-average rainfall in parts of Chile. Other mines, as well as farmers, have sounded the alarm.

Los Pelambres, which is located about 200 km (125 miles)north of Santiago, produced some 405,000 tonnes of copper in 2014. Chile, the world's top copper exporter, had an overall output of around 5.8 million tonnes. (Reporting by Rosalba O'Brien; Editing by Marguerita Choy)