Argentina’s Mendoza Province suspends mining, new permits & claims
The ongoing conflict between officials in Argentina’s Mendoza Province and miners escalated as the provincial parliament Wednesday suspended all open-pit mining, and halted issuing any new exploration and mining permits in the province.
Wednesday’s decision will also ban the awarding of mining claims until they are approved by the environmental plan of law 5.961, or each of the 18 departments in the province holds a public vote to express its support of, or opposition to, mining.
The head of the Provincial Mining Chamber said two precious metals projects are currently in the feasibility stage in the province including Canadian juniors Exeter Resources’ La Cabeza gold/silver project and Global Copper’s San Jorge gold and copper property.
The new law isn’t expected to affect Rio Tinto’s $735 million PRC potash mine project, which is expected to begin construction in 2007. Argentina’s Mining Chamber Cã¡mara Argentina de Empresarios Mineros (CAEM) expressed its support for more than 600 mining projects registered in the province, which represent a total investment of $1 billion over the next three years.
Mining opponents in Mendoza said they are most concerned about metals mining, fearing its chemical could pollute water supplies. The province is the center of Argentina’s growing wine industry. The main industry in the area is agriculture. However, lime and uranium are currently mined in the province.
Mendoza Mining Director Alberto Rubio told Business News Americas that Wednesday’s decision is unconstitutional because ”all mining activity in Argentina is controlled by the mining code, which is nationwide and can only be modified by the national congress.” Rubio said that he believes Provincial Governor Julio Conos will veto the new legislation.
In a statement, CAEM President Martin Dedeu said, ”It is very serious that an industrial and productive activity is being attacked at a time when investment to develop the sector is essential.”
In September 2005, Mendoza Province passed a law trying to block an exploration project by Canadian junior Tenke Mining on environmental grounds. At the same time, the provincial government halted all mining exploration for 90 days while it fine-tuned regulations.
Prior to that, in 2003, miners clashed with the provincial government over a law, which expanded the Laguna del Diamante nature reserve in San Carlos, which impacted Anglo American and two other companies.
In July 2005, legislators in the Rio Negro Province enacted a law banning the use of cyanide and mercury in mineral processing. A year later, the Governor of Chubut enacted a three-year metal mining moratorium, impacting Meridian Gold’s proposed Esquel gold project.
Despite the setbacks, investment in Argentina’s mining sector has boomed in recent years and is anticipated to hit US$6 billion between 2006 and 2010.