In the absence of the necessary valley topography, karst depressions are sometimes used to construct conventional impoundments in order to contain tailings. Leakage is a primary concern for such impoundments. The purpose of the current study was to determine the characteristics and barrier performance of laterite mantling karst depressions, using, as an example, the Wujiwatang (WJWT) tailings impoundment, located in the Gejiu mining area, southwestern China. The geotechnical-hydrogeological properties, geochemistry, mineral compositions, and particle shapes of the laterite were investigated by geotechnical techniques, chemical analysis, X-ray diffraction (XRD), and scanning electron microscopy (SEM). The results showed that the laterite contained poorly sorted particles that covered a wide spectrum of grain sizes (<5 mm to <50 nm), and was unexpectedly categorized as silty clay or silt with a high liquid limit. The continuous gradation and small D90 value helped the laterite achieve saturated hydraulic conductivities in the range of <10–6 cm/s required for impoundment liners. The laterite beneath the tailings impoundment was finer-grained and had a lower permeability than that of the laterite on the depression walls within the same depression. Geochemically and mineralogically, the laterite was classified as true laterite and its major mineralogical constituents were gibbsite and goethite with chlorite occurring in trace amounts. The laterite was dominated by subspherolitic–spherolitic cohesionless grains (concretions) made up of Al, Fe, Ti, and Mn oxides and hydroxides. The laterite did not have plasticity indices in the clay range. Fortunately, slopewash prior to tailings containment selectively transported the finer oxide concretions to the depression floor, creating a natural low-permeability barrier for the WJWT tailings impoundment. This is undoubtedly important for the planning and design of future karst depression-type tailings impoundments around the world.