In a speech, the minister, whose portfolio also includes mining and energy, appeared to brush aside environmental concerns about the megaproject planned by Canadian metals group Noranda Inc. .

"Rodriguez has declared his support for a project before it has been approved and ratified by a board of ministers which he forms part of...This removes all credibility, transparency and legitimacy of the environmental institutions," government deputy Guido Girardi told reporters.

Girardi, who heads a small party in the coalition of President Ricardo Lagos, supports environmentalists' concerns about the $2.75 billion Alumysa plant.

Campaigners say the installation could cause irreversible damage in the Aysen region, a zone of unspoiled beauty in southern Chile.

Noranda says the plant, which would have an annual capacity of 440,000 tonnes, would not pollute the area and that the project complies with environmental norms.

The minister told a meeting of salmon and trout farmers that the sparsely-populated area was of little use to the country without investment.

STRONG COMMENTS

"What use is an unpolluted area in the world if there is nobody there?" Rodriguez said.

The fish farmers fear the plant could pollute water in the area.

He added: "I'm in favor of all projects in Chile. It is the only way we have for continued growth and to generate new jobs and for that reason I refuse to accept there are projects that are incompatible."

Noranda proposes to create 8,000 temporary jobs over the five-year construction period and 1,100 for during the plant's 50-year operational life.

Aysen, treasured by adventure travelers for its volcanoes, glaciers, Pacific fjords and wildlife, is also one of the poorest areas of the country.

The environmentalists fear the minister's remarks could favor the approval of an environmental impact study, presented by Noranda and currently being evaluated by the Chilean government.

Under Chilean law, companies proposing construction projects must compile a study of the effects on the environment that construction could have. This has to be approved by a government environmental watchdog and a board of ministers on which Rodriguez sits.

A lawyer representing the environmentalists urged the president to take a stance.

"Until President Lagos declares his opinion on the issue, we can assume he shares Rodriguez's view, which means that the process of environmental approval is a mere facade because conclusions are taken for political reasons beforehand," lawyer Fernando Dougnac told Reuters.

Noranda, a Toronto-based metals and mining company, has operations in nine countries.