The Chilean authorities have given approval for a proposed $1.5bn (£800m) gold project in the Andes despite opposition from environmental groups.
The planned mine straddles the border
International mining company Barrick Gold wants to start extracting gold and silver from the area by 2009.
The company says the project known as Pascua Lama will adhere to strict rules to avoid destruction or contamination of glaciers and water sources.
Opponents say the mine will have a devastating impact on the environment.
"As with all of its other operations around the world, in Chile Barrick will maintain its philosophy of responsible mining," Barrick's Chile director Jose Antonio Urrutia said in a statement.
Chile's National Environmental Commission, Conama, gave final approval on Tuesday, hearing just two of 46 complaints filed against the Pascua Lama project.
The proposed mine is located across the Andes, approximately 150km (93 miles) south-east of Vallenar in Chile and 300km (186 miles) north-west of San Juan in Argentina.
A final decision is still due from the authorities in Argentina, where opposition is much less vocal, correspondents say.
Opponents argue that the Pascua Lama operation will lead to the destruction of glaciers, so contaminating pure water sources and affecting the livelihood of indigenous farmers.
A recent report drawn up by Chile's Diego Portales University warned that the project could have devastating consequences for community water rights and for indigenous farmers in the area.
Barrick argues that the planned mining pit will not lead to the destruction of glaciers as alleged.
It says 95% of the minerals are not under glaciers or ice fields, and that protection of the remaining 5% is a key condition of getting approval for the project.
The company says the mine will bring badly needed jobs to a depressed region.