Chile's Supreme court has suspended the development of El Morro mine after siding with indigenous groups opposing it.

They say the mine in northern Chile is planned on what they deem as sacred ancestral land, and that it could pollute a local river.

The country's highest court on Tuesday ordered the project's environmental permit to be halted until the Diaguita indigenous community is consulted about the $3.9bn gold and copper mine.

"The Diaguita people are happy that justice is on the side of the humble, of those who defend Mother Earth, our water resources and our indigenous land,'' Diaguita leader Maglene Campillay said after the ruling.

The Supreme court overturned a lower court decision dismissing an appeal the Diaguita filed in April.

Canadian owned Goldcorp is based in Vancouver and owns 70 percent of the mine.The remaining 30 percent is owned by New Gold Inc.

On hold

Goldcorp is now reviewing the ruling to determine its next step, said company spokeswoman Christine Marks.

"Goldcorp remains committed to open and transparent dialogue with its stakeholders and to responsible practices in accordance with the highest applicable health, safety and environmental standards,'' Marks said.

Chile is the world's top copper producer and has some of Latin America's most stable ground rules for mining , an industry the country relies on for most of its economy.

Several mining projects in mineral-rich Chile have been put on hold after opposition by local communities, as billions of dollars worth of projects have been put on ice or delayed in recent years.

Last year, Chile's environmental regulator blocked work at Barrick Gold Corp's $8.5bn Pascua-Lama.

Source: Agencies