PUERTO AISEN, Chile – The region of Aisen, a rugged, remote area of Patagonia in southern Chile, is dominated by mountains, forests, fjords, glaciers and waterways. “You’ve got untarnished nature here,” says Yasna Jara, a resident of Puerto Aisen, a city of 18,000 that sits high in the mountains and is shrouded in clouds for much of the year.

What little industry there is here consists of fish processing and salmon production. But industrialization may soon take a giant step forward: Canadian mining giant Noranda Inc. wants to build an aluminum production plant some 20 kilometres southwest of Puerto Aisen, plus three hydroelectric generators to power it.

Plans for the plant, which would produce 440,000 tons of aluminum a year, still must be approved by Chile’s environmental oversight agency, known as Conama. And Noranda must find a partner to help finance the US$2.75-billion project, which would employ 1,100 once it’s open and represents the biggest project of its kind ever in Chile.

Predictably, the project, called Alumysa, has sparked opposition among environmentalists and a debate over the type of development that should be allowed in an area as pristine as Chilean Patagonia.

Many local residents welcome the prospects for job creation and economic development in this cold rainy zone. “We live in a terribly isolated area,” says Arnoldo Gonzalez, a supporter of the project who frequently promotes it on his local radio show. “We want to live better.”

Critics, on the other hand, fear the plant’s emissions could damage the ozone layer. They also worry that if Noranda comes in, others will be sure to follow. “We say Aisen is up for auction,” says Miriam Chible, a member of the coalition that is fighting the project.

Salmon producers, who raise their fish in inlets and bays up and down Chile’s southern coastal area, worry of harm to their stocks in Chacabuco Bay near the proposed plant, in the form of fluoride emissions and unspecified industrial accidents.

The authorities are officially neutral while the environmental review is underway. But mention jobs and they become enthused. “In general, I’m in favour of development so people in the region have more opportunities to improve the quality of their lives,” says Paz Foitzich, governor of the province where the plant would be built.

Noranda, a big player in Chile’s copper industy, says Alumysa’s impact would be minimal. All emissions would comply with Chilean, Canadian and World Bank standards, and studies show they’d cause no harm to either the public or the salmon, at least in the quantities to be discharged.

“Noranda has done things well,” says Robert Biehl, the Chilean businessman heading up Alumysa. He gestures to the 24-volume Alumysa environmental impact study and says that increasing environmental awareness around the world has engendered good practices.

“You have to comply with international norms. We’re in a globalized world and you can’t export something if you pollute. No one will buy,” he says.

Aisen is Chile’s least populated and most isolated region. Until a decade ago, mountains and fjords prevented completion of a road connecting Aisen to more populated stretches further north. Even now, the roadway is a bumpy, gravel pathway, subject to washouts. “The lack of opportunity for our people is significant,” says Mr. Foitzich.

Developers started coming here in the late 1980s, believing the rivers could be harnessed for power. An alumunium smelter, which requires vast amounts of electricity, was a logical possibility.

Noranda became interested in 1991. Its plan calls for damming two lakes and a river to create hydroelectric plants that would generate power. A port would be built near an existing facility in Puerto Chacabuco on Chacabuco Bay, about 15 km southwest of Puerto Aisen, to receive the ore.

Noranda has been preparing responses to queries submitted by Conama after it reviewed the company’s environmental impact study last year. The agency wants more information about emissions and their impact, details of where workers would be housed and the precise aluminum reduction technique to be used, among other things. Mr. Biehl expresses confidence the project will be fully compliant.

The review process could continue indefinitely, depending on what information Conama seeks, but once approved Alumysa would take five years to build. Beyond project specifics, opponents and others continue to debate the larger issue: What will become of Aisen if industrialization were to come. Showdowns are likely in coming months. “This is one of the last pure areas of the world,” says Patricio Ramos, part of the anti-Alumysa coalition. “Do we want to become just another industrialized area with smokestacks?”

Mr. Biehl observes that aluminum plans operate in scenic areas of Canada, Norway and elsewhere without undue environmental hardship.

But for Ms. Jara, the Puerto Aisen resident, it’s a foregone conclusion that Alumysa will have an environmental price tag. Still, she acknowledges the region needs jobs. “Where man passes, he always leaves a footprint,” she says. “No matter what, he will always leave his mark.”