POLITICAL ECONOMY

Argentina's Chubut governor wants more control over mining

The governor of Argentina's Chubut Province has introduced a bill he says will define a general framework for regulating and permitting mining and oil projects, including open-pit operations.

RENO (MINEWEB) - 

The governor of the Chubut Province in Argentina has submitted to the provincial legislature a bill which provides for state ownership of mining operations and an increase of 3% to 8% in mining royalties.

Gov. Martin Buzzi introduced legislation that would also "directly impact the regulatory regime for mining in the province," said Pan American Silver, which owns the Navidad silver project in Chubut.

The legislation would maintain the 5001 law prohibiting open-pit gold mining that uses cyanide in mining processes. However, Buzzi stressed "we are defining the general framework" for mining and oil projects including labor practices, environmental compliance, community consultation, increased provincial royalties, defined government participation in projects, as well as defined areas where open-pit mining will be allowed.

However, the bill also mandates that 80% of a mining project's workforce must be residents of the province.

The royalties called for in the legislation will form a Sovereign Wealth Fund, which will be used to finance alternative energy projects, the governor said.

In a news release, Pan American Silver said, "The company expects that a detailed regulatory document will be formally presented to the Chubut legislature within the coming days, at which time Pan American will be able to review the precise details of these regulatory proposals and evaluate their impact on the Navidad project."

"The company can provide no assurance whether the proposals discussed yesterday will be presented to the Chubut legislature, enacted as law in Chubut or whether the proposals will be subject to amendment by the Chubut legislature," said Pan American.

The Navidad deposit is located in the department of Gastre, in the Province of Chubut. A preliminary assessment outlines a 15,000 tpd operation with a mine life of 17 years. Average annual silver production within the first five years of operation is estimated at almost 20 million ounces. Copper-silver and lead-silver concentrates would be produced and exported for treatment outside of Argentina.