BUENOS AIRES (Reuters) - The Argentine government wants to unify mining regulations under a proposed federal law that would permit open-pit mines to operate throughout the country as part of an effort to jump-start investment in the sector, a government official said.
Argentina has fallen behind its mineral-rich neighbors Chile and Peru in mining investment, despite containing rich deposits of copper, gold, silver and zinc. Local regulations are tough, and seven of the country’s 23 provinces prohibit open-pit mining altogether due to environmental concerns.
“We have decided to invite the provinces back into the system by way of a federal agreement,” Argentine Secretary of Mining Daniel Meilan said in an interview last week. The government plans to send its mining bill to Congress early next year, he added.
The country’s mining sector attracted scant investment under the 2007-2015 government of Cristina Fernandez, who increased the state’s role in Latin America’s No. 3 economy. She was succeeded by free-markets advocate Mauricio Macri, who has eliminated mining sector export taxes.
He also lifted Fernandez’s prohibition on foreign mining companies sending profits made in Argentina out of the country.
Analysts say there is some $400 billion worth of untapped mining resources underground in Argentina.
Ricardo Martínez, head of Buenos Aires-based mining consultancy Viento Andino, said Peru and Chile are each expecting $30 billion to $50 billion in mining investment over the next five years, dwarfing current expectations in Argentina.
The lack of a nationwide mining law “is perhaps the only impediment to investment” in the sector, said Hugo Nielson, secretary general of the Latin American Mining Organization, a regional grouping.
Gaining the backing of provincial governors is expected to be challenging, as many local officials prefer not to cooperate with the sector, mining sector experts said.
Meilan said details of the proposal will be hammered out with local officials before the bill is sent to Congress.
The first step will be to draft the bill with input from the Federal Mining Counsel (Cofemin), a grouping of regional mining officials.
“Then we we’ll sit down with the governors and negotiate an agreement of the proposal that will be sent to Congress,” Meilan said.
Writing by Hugh Bronstein; Editing by Matthew Lewis