LATIN AMERICA — Argentine government manoeuvres to attract dollars to mining sector

Although mining represents but a small portion of Argentina’s economy, more and more mineral development projects are expected to enter production there.

The country currently produces 35,000 oz. gold per year plus small quantities of lead, zinc and silver. And while the industry generates about US$500 million in revenue, that figure is expected to begin increasing once the Bajo de la Alumbrera copper-gold deposit, in Catamarca province, comes into producton.

Not surprisingly, the Argentine government is going out of its way to promote the country’s mineral potential to more foreign investors, including Canadians.

Daniel Meilan, Argentina’s deputy secretary of mining, recently stressed the importance of Canada’s contribution to his country’s mining sector. While visiting Toronto for the annual convention of the Prospectors & Developers Association of Canada, he said 45% of the mining concessions in Argentina are held by Canadian companies. Chief among these are Rio Algom (ROM-T), which owns 25% of the Bajo de la Alumbrera deposit, Northern Orion Explorations (NNO-T) and Royalstar Resources (RYQ-V).

To ensure that more of Argentina’s land base is opened up for exploration by Canadian and other foreign-based companies, the Argentine government recently entered into an arrangement with the World Bank to revise the country’s Mining Code.

Because many of Argentina’s 24 provinces operate independently of the central government, different mineral laws apply in certain regions. A company that owns a concession that straddles a provincial border, for example, must abide by the laws of each province.

The revisions to the Mining Code are intended to unify such laws, as well as introduce regulatory and institutional reforms that encourage private investment. The World Bank will contribute US$30 million to the program, with the Argentine government financing the remainder.

The government is also creating a common database, to consist of technical information to be shared among labratories, financial institutions and investors. Initially, these data will be available in San Juan, San Luis, Catamarca, Salta, Mendoza and La Rioja and will eventually be available in all mining provinces.

Environmental laws are also under review, as is land tenure. The latter iniative is intended to address previous disputes, such as the one between Mansfield Minerals (MDR-V) and Corriente Resources (CTQ-T) at Cerro Samenta in Salta province (T.N.M., Dec. 12/96).

In addition, steps are being taken to resolve border disputes with neighboring Chile. The two governments are negotiating the creation of non-restrictive customs zones around two mining projects.

At one of these, the Indio project of Barrick Gold (ABX-T), gold mineralization extends across the border into Chile, and the company has secured an agreement whereby unimpeded exploration can continue.

At the Pachon copper project of Cambior (CBJ-T), the countries have arrived at a compromise. The project now enjoys less stringent border and customs restrictions because, according to an agreement, copper concentrates can be piped through Chile to Pacific ports.