The Chilean government has shut down the water system attached to the Maricunga mine operated by Canadian company Kinross Gold, citing environmental damages, the SMA regulator said in a statement.
Maricunga produces 230,000 ounces to 250,000 ounces (6,520 to 7,090 kg) of gold per year. The regulator said on Friday that the company may no longer take water from wells in the Pantanillo area, near the mine, due to environmental harm caused by the operation.
The SMA said the mine cannot operate without access to the wells.
Local newspaper El Mercurio on Sunday quoted the company as saying that environmental damage in the area had been caused by drought rather than extraction operations.