Judges in The Hague voted 14 to one in favour of Uruguay, saying construction should be allowed to continue while the court considers the overall case of whether the mills pose a risk to the environment once they become operational.

The Argentine government sought to halt construction while environmental impact studies were conducted. The mills had been the subject of fierce protests in Argentina, especially in the town of Gualeguaychu, which sits across the Uruguay River from the site of the mills and relies heavily on tourism.

Advertisement

Uruguay insisted that the mills would adhere to strict pollution controls and would give a much needed stimulus to the border-area economy. The combined investments by Finnish company Metsa-Botnia and Spanish company Ence, totalling $1.8bn, are the largest foreign investment in Uruguay’s history.