With its Pascua Lama gold mining project on indefinite hiatus because of an impasse with Chilean officials over issuing needed environmental permits, Barrick Gold (NYSE:GOLD) has apparently called in the reinforcements as Argentinean authorities try to intercede on its behalf. It's possible having friends in high places could remove the impediments that have been blocking its path, but I wouldn't count on it happening anytime soon.

Pascua Lama project. Source: Barrick Gold.

Last month, Chile voted in a new government and Argentinean officials are clamoring for a meeting with center-left President-elect Michelle Bachelet who will take power in March. They'll likely argue that along with the thousands of jobs that were killed on the Chilean side of the border when Barrick put the gold project into mothballs, there are 5,000 jobs at risk on the Argentine side as well.

Straddling the two countries, Pascua-Lama is one of the world's largest gold and silver resources, expected to produce up to 850,000 ounces of gold and 35 million ounces of silver in its first five years of operation, at exceptionally low operating costs. It's said to possess nearly 18 million ounces of proven and probable gold reserves and 676 million ounces of silver. It is also the main foreign investment project in Argentina following Vale's (NYSE:VALE) decision last year to halt a $6 billion potash project at the beginning of the year after costs are said to have ballooned 86% to $11 billion.

While Chile's economy has long benefited from its export of copper as it is the world's No. 1 producer of the red metal, along the way becoming the wealthiest in Latin America according to the International Monetary Fund, the country also recognizes its dependence upon commodities, something that wouldn't exactly change by easing the restrictions on Pascua-Lama. It's also been a rallying point for opponents who feel they have not benefited from the riches that have been mined.

Bachelet already has a full plate when it comes to problems confronting the new administration, including slowing GDP growth, a campaign promise to raise corporate taxes 25%, and border conflicts with Peru, Bolivia, and even Argentina. Pleas for leniency in environmental matters because it impacts a neighbor may very well fall on deaf ears.

Moreover, because copper is key to its economy, Chile is more likely to wonder how best to help Codelco, the nationalized copper miner, than anything else. Although Anglo American (OTC:AAUKY) plans on making substantial investments at Los Bronces and BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) jointly operate Escondida, the world's largest single producer of copper, their investments are imperiled by Bachelet's plans because Codelco is likely to need a massive recapitalization. That will bring more pressure to bear on the private sector as a source for government revenues because the new president's proposed spending programs means it won't be able to afford all of those things, especially in the face of copper prices that remain about 10% below year where they were a year ago.

Bachelet also went on record during the campaign saying the country's mining royalties system needs to be revamped and that Barrick needed to comply with the government's dictates before being allowed to go forward. In short, having Argentine's government give voice to Barrick Gold's needs is helpful, but ultimately won't move the needle very far.