Monday, June 24, 2024

ECONOMY | 31-05-2024 11:50

The home of Malbec wine makes a play for copper in Argentina mining revival

Mendoza Province is moving to spur exploration of its copper deposits long shunned by prospectors due to restrictions and red tape.

Argentina’s Mendoza Province, known for Malbec vineyards that draw tourists from across the world, is moving to spur exploration of its copper deposits long shunned by prospectors due to restrictions and red tape.

Authorities have identified a vast region in the Andes Mountains — about the size of New Jersey — where they plan to expedite environmental permits with blanket authorisation to unlock copper projects and tap a booming market of the metal needed for the global push toward electrification.

“We have more than 300 mining properties in limbo because of environmental hurdles,” Emilio Guinazu, head of provincial mining promotion agency Impulsa Mendoza, said in an interview. “That’s what we’re tackling with this measure, so that miners will cement their desire to get to work in Mendoza.”

Mendoza’s biggest export is wine, but more recently the province that borders copper powerhouse Chile has been reviving its idled mining industry. Its officials are eying the wiring metal after finding new investors for a potash project abandoned a decade ago and as Argentina’s new President Javier Milei tries to deregulate his nation’s economy to drive growth.

The province’s push for copper comes at a key time for the industrial metal. Fears of shortages have propelled prices to record highs and sparked metals producers to scour the world for opportunities to mine new deposits or acquire rivals.

While copper deposits were identified in Mendoza in the 1980s, provincial authorities never opened their arms to mining and there has been no serious prospecting for 20 years. An anti-mining sentiment also took hold, culminating in 2019 when the then-governor, siding with environmentalists, vetoed a law that would have allowed miners to use chemicals like cyanide and sulfuric acid.

The projects Mendoza targets now in its Malargüe region — southeast of one of the world’s biggest copper mines, Codelco’s El Teniente in Chile — would produce the metal without those banned chemicals.

“We need to stop crying about what we can’t do and focus on what we can do,” Guinazu said.

Fortescue Ltd, First Quantum Minerals Ltd and Canadian juniors have expressed interest in the deposits, Guinazu said. Perth-based Fortescue and Vancouver-based First Quantum didn’t respond to requests for comment.

As well as the blanket environmental authorisation in Malargüe, which could come by September, lawmakers recently tweaked Mendoza’s mining rules to pare back red tape and establish clearer terms for doing business.

Malargüe is ripe for development since communities are keen for the investment and jobs that mining can bring, with claims below the altitude of protected glaciers and far enough from vineyards that competition for water won’t be an issue, Guinazu said. Copper projects in San Juan Province, bordering Mendoza to the north, are grappling with such environmental and social issues.

Current property holders in Malargüe include local energy mogul Marcelo Mindlin — one of several Argentine oilmen pivoting to metals — and China’s Hanaq Group, Guinazu said.

by Jonathan Gilbert & James Attwood, Bloomberg


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