Argentina court upholds glacier protection law

SANTIAGO, CHILE — In a landmark ruling, Argentina’s Supreme Court has upheld radical legislation to protect the country’s glaciers, with major implications for the mining industry.

The 2012 law aims to ban all harmful activity from glacial and peri-glacial environments identified through a nationwide survey.

Barrick Gold (TSX: ABX; NYSE: ABX) and the pro-mining government of San Juan province had sued to have the legislation declared unconstitutional as it breached the company’s right to undertake mining. The western province is home to both the Canadian company’s Veladero gold mine and half of its cross-border Pascua Lama gold project.

But in a judgment issued on June 4, the Supreme Court judges dismissed claims that the law would harm the company’s interests.

Unsurprisingly, the ruling has been celebrated by environmentalists.

“We are not opposed to mining, just the destruction of glaciers which an important source of water in semi-desertic regions,” Gonzalo Strano, a spokesman for Greenpeace Argentina, told The Northern Miner.

Authorities in Buenos Aires, who view mining as a sector that could help the struggling economy out of its latest slump, were more cautious.

While the Supreme Court ruling offered legal certainty, Carolina Sanchez, Secretary for Mining Policy, noted that concern for the glaciers had to be balanced with the country’s investment needs.

“Environmental protection and developing mining are both state policies in Argentina,” she said in a statement.

A spokeswoman for Barrick Gold said only that the company was now studying the impact of the decision.

There is little doubt that the ruling has serious implications for the development of mining projects in Argentina, especially in the mineral-rich Andes Mountains.

A leaked government document from 2016 published by Greenpeace Argentina identified forty-four mining projects potentially affected by the Glacier Protection Law.

A hiker at McEwen Mining’s Los Azules advanced-stage porphyry copper project located in the Cordilleran region of San Juan Province, Argentina near the border with Chile. Credit: McEwen Mining.

While the majority are early-stage prospects, the list also includes Veladero, Pascua-Lama, Glencore’s El Pachon copper-moly-silver project, McEwen Mining’s (TSX: MUX; NYSE: MUX) Los Azules porphyry copper project and the Agua Rica copper-moly-gold-silver deposit now under consideration by the owners of the Alumbrera mine [Glencore, Newmont Goldcorp (TSX: NGT; NYSE: NEM) and Yamana Gold   (TSX: YRI; NYSE: AUY)].

McEwen Mining did not respond to questions from The Northern Miner about the impact of the law on the Los Azules project.

The company’s 2013 preliminary economic assessment for Los Azules said that several small “rock glaciers” have been identified on the property but these had not been and would not “be impacted by the company’s future exploration activities or the development of a mining project.”

The crux is likely how the law is now to be implemented.

For environmentalists, the ruling means the law should be imposed forthwith, blocking all mining activity on and around glaciers

“There’s now no excuse, the law must be fulfilled,” Strano said.

Top of their wish-list is closing Veladero, which has long been under fire for its patchy environmental record, especially for a series of spills of cyanide solution into local rivers.

But responsibility for imposing the law lies with Argentina’s provincial authorities which have widely varying approaches to mining. While governments in San Juan and Salta are broadly pro-mining, other provinces offer more difficult terrain for mining companies, imposing bans on open-pit mining, mining in mountainous areas or the use of key chemicals to halt the industry’s advance.

Following the ruling, Secretary Sanchez promised the government will “work with the provinces to strengthen the mining sectors, which is still in its infancy in our country, while protecting natural resources.”

But attempts by President Mauricio Macri’s government to homogenize mining policy on a national basis in order to attract investors have made little progress so far.

As a result, implementation of the law will not mean a blanket ban on all projects located near glaciers, experts say. Instead, each project will have to be assessed according to its individual situation as well as the criteria of local provincial authorities.

“It’s definitely not a good ruling for the mining industry but the impact will differ case by case. It’s going to affect projects but it’s difficult to say which ones and how,” explained mining lawyer Florencia Heredia of Allende & Brea.

Argentina is not only the Andean country concerned by the impact of mining activity on glaciers.

Similar legislation to the Argentinean law is being considered by Chilean lawmakers.

As a decade-old drought takes its toll on the country’s water supplies, farmers and environmentalists view protecting a disappearing water source as an imperative.

At stake could be the future of some of the country’s largest mines.

Although President Sebastian Piñera’s pro-business government said last year that it would not back the bill, the legislation is nevertheless making progress through the opposition-controlled Congress.

Earlier this month, senators voted overwhelmingly in favor of debating the bill. Lawmakers and the government now have until the end of June to present amendments before the bill is debated in detail by the Senate’s Environment and Mining Commissions.

Processing facilities at Anglo American’s Los Bronces copper mine in Chile. Credit: Anglo American.

Mining projects at risk include the neighbouring Andina and Los Bronces copper mines — controlled by Codelco and Anglo American (LON: AAL) respectively — in the mountains outside of Santiago. Codelco has already scaled back a major expansion of Andina so that it will not impact the glaciers that surround it while Anglo has said it may drop a planned US$3 billion expansion of Los Bronces unless it can win over local communities who fear its impact on water supplies.

Following this month’s vote, Mines Minister Baldo Prokurica has announced the creation of a technical commission that will seek ways to conciliate mining activity with glaciers.

— Based in Santiago, Chile, Tom Azzopardi is a freelance business writer specializing in natural resources.