Chile has rejected an US$8 billion proposal to dam Patagonian rivers to meet growing energy demand, a victory for environmentalists who called the ruling a landmark moment.
A ministerial commission on Tuesday rejected the HidroAysen plan, under which two of the world's wildest rivers would have been blocked and more than 1,600km of power lines built to supply energy to central Chile.
After a three-hour meeting the ministers of agriculture, energy, mining, economy and health voted unanimously to reject the project. The committee "decided to side with complaints presented by the community", the environment minister, Pablo Badenier, said.
The project entailed building five dams on the Baker and Pascua rivers in Aysen, a remote area of southern Patagonia where rainfall is nearly constant and rivers plunge from Andean glaciers to the Pacific Ocean.
Patricio Rodrigo, executive secretary of the Patagonia Defence Council, called the decision "the greatest triumph of the environmental movement in Chile".
It "marks a turning point, where an empowered public demands to be heard and to participate in the decisions that affect their environment and their lives", Rodrigo said.
Chile desperately needs energy, but most Chileans opposed the HidroAysen plan, and protests at times turned violent.
"This is truly amazing news," said Margarita Baigorria Cruces, an Aysen resident who led a petition campaign against the project for activist group Avaaz.
"We were dreaming and hoping this would happen. We won't be condemned to drink gold. Water is our treasure and this historical victory was meant to be sooner or later."
HidroAysen executives had promised that the region would get cheaper energy, jobs, scholarships and millions of dollars worth of infrastructure.
But people in the sparsely populated area remained divided. About three dozen families would have been relocated, but the dams would have inundated 5,700 hectares of land, required clear-cutting through forests, and the elimination of white-water rapids and waterfalls that attract ecotourism.
They could also have destroyed habitat for the endangered Southern Huemul deer. Fewer than 1,000 of the diminutive animals, a national symbol, are believed to exist.
With its energy-intensive mining industry demanding more power, experts say Chile must triple its existing 18,000MW capacity in just 15 years, despite having no domestic oil or natural gas resources.
The dams were planned to generate 2,750MW, almost a third of central Chile's current needs, within 12 years.
Before she was elected last year, President Michelle Bachelet had said the HidroAysen plan was not viable. She announced last month that she would instead tackle Chile's energy problems by building up alternative energy sources and creating terminals for importing liquefied natural gas.
The HidroAysen joint venture is 51 per cent owned by European firm Endesa and 49 per cent by Chilean company Colbun. Endesa is a Spanish subsidiary of the Italian energy company Enel.
The company can appeal to an environmental court, and analysts expect a long legal battle. HidroAysen officials were not available for comment.