2011 Minerals Yearbook ARGENTINA U.S. Department of the Interior September 2013 U.S. Geological Survey THE MINERAL INDUSTRY OF ARGENTINA By Susan Wacaster Argentina is a mineral-rich country that produces and Government Policies and Programs exports mineral commodities and raw materials. Argentina has deposits of metals, including copper, gold, lead, silver, Argentina’s Mining Code [El Codigo de Mineria] was and zinc; energy minerals, including natural gas, crude enacted by the Argentine Congress on November 25, 1886. The petroleum, and uranium; a wide variety of industrial minerals; Mining Code underwent significant revisions in 1993 with the and minerals that are important for numerous industrial and enactment of law No. 22,224 (Mining Reorganization Law) manufacturing applications, such as cadmium and lithium. The and law No. 24,228 (Federal Mining Covenant); in 1995 with value of production of goods (including those from agriculture, the enactment of law No. 24,498 (Mining Modernization Law), forestry, and livestock; construction; electricity, gas, and water; law No. 24,523 (creation of the National Mining Trade System fishing; manufacturing; and mining and quarrying industries) of the Mining Secretariat), and law No. 24,585 (Environmental accounted for 37.6% of the country’s nominal gross domestic Protection Mining Law); and in 1997 with the passage of law product (GDP) in 2011 compared with 37.9% in 2010. In No. 25,225 (modifications) (Secretaría de Minería de la Nación, 2011, Argentina was estimated to be the world’s second ranked 2011). producer of boron and the fourth ranked producer of lithium and Argentina’s Secretaría de Minería de la Nación [Mining strontium (from celestite) (Angulo, 2012a, b; Instituto Nacional Secretariat] is responsible for the administration, development, de Estadística y Censos, 2012a; Jaskula, 2012). and promotion of mining and mining investment. The Dirección Mining companies invested about $2.7 billion in Argentina in Nacional de Planificación Estrategica Regional [National 2011, and that figure was expected to increase in the next few Directorate of Regional Strategic Planning] and the Servicio years as major construction on advanced projects, including Geológico Minero Argentino (SEGEMAR) [Geological and Barrick Gold Corp. of Canada’s Pascua Lama gold mine and Mining Service of Argentina]—which operates as a dependent Vale S.A. (Vale) of Brazil’s Potassio Rio Colorado potash mine, decentralized agency—were under the authority of the Mining were expected to be completed. Government intervention in Secretariat. The Camara Argentina de Empresarios Mineros the economy and an increasing risk of resource nationalism, [Argentinean Chamber of Mining Companies] is a civil however, was a growing concern for foreign mining companies association dedicated to the development of a sustainable and in Argentina. After the country’s currency crisis of the early prosperous mining industry (Ministerio de Planificación Federal, 2000s, Argentina took on an export-based economic growth Inversión Pública y Servicios, 2011; Servicio Geológico Minero model, but recent import restrictions were implemented by the Argentino, 2011). Government in an attempt to mitigate a shrinking trade surplus. On October 26, the Government of Argentina released The extent to which Government interventions were going to Decree No. 1,722/2011. The Decree was issued by the Central affect foreign mining investments was unclear in 2011, but in Bank but ratified by the national Government. In an attempt to October, legislation was passed that could require repatriation of control inflation and the outflow of the Central Bank’s foreign export revenues for mining and hydrocarbon companies (Latin currency reserves, the Decree required that all export revenues American Tax Newsalert, 2011; Jasamie, 2013). generated by both the mining and energy sectors remain in, or be repatriated to, Argentina to be exchanged on the local market. Minerals in the National Economy This appeared to be a contradiction of the 2004 Decree No. 753 that authorized mining and oil and gas companies to take their Mining and quarrying accounted for 8.3% of the total value export revenues out of the country, but similar to the 1964 generated by the production of goods in 2011 compared with Decree No. 2,581 that required energy companies to place all 8.8% in 2010. Argentina’s estimated nominal GDP increased export revenues within local markets. Decree No. 1,722/2011 by 8.9% in 2011 compared with 9.2% in 2010. The mining was aimed at all industries within the country. The new and quarrying sector accounted for about 3.1% of Argentina’s requirements were expected to apply to export transactions GDP in 2011 compared with 3.3% in 2010, although it reached finalized since October 26, 2011, but under the Central Bank’s 4% of the GDP in the third and fourth quarters of the year. The rules, the obligation would also affect proceeds from previous value contributed to the GDP from mining and quarrying had exports for which payment had not been collected before that increased every year since at least 1993, when it accounted for date. An estimated $3 billion to $4 billion in revenue was 1.5% of GDP. That same value nearly tripled in 2002 compared reportedly expected to be generated by the new requirements, with that of 2001 when Argentina’s currency crisis, combined but it was not clear over what period of time that amount of with favorable tax policies, allowed mining investors to money would be generated (Buenos Aires Herald, 2011; Latin exploit mineral commodities for a fraction of the cost (Instituto American Tax Newsalert, 2011). Nacional de Estadística y Censos, 2012a). ARGENTINA—2011 2.1 Production $17 billion in 2010; it was followed by China ($10.6 billion), the United States ($7.7 billion), Germany ($3.6 billion), and Primary aluminum production increased by 6.6% in 2011 Mexico ($2.5 billion) (Instituto Nacional de Estadística y compared with that of 2010 to 432,000 metric tons (t). The Censos, 2012b, p. 26, 113–116). increase was the result of increased production by Aluar In 2011, Argentina’s exports of coal and peat increased by Aluminio Argentino S.A.I.C. (Aluar), which approached 63.6% to $3.6 million compared with that of 2010 and exports its recently expanded smelter capacity of 455,000 t but was of crude petroleum and natural gas decreased by 17.9% to prevented from reaching or exceeding that capacity because $2.3 billion. The value of exported metallic minerals was of a smelter shutdown. The copper content of mine production $1.8 billion, which was the same as in 2010. About $27 million decreased by 16.6% in 2011 to about 116,700 t because of worth of stone, sand, and clay were exported, which was an decreased ore grade at Minera Alumbrera Ltd.’s Alumbrera 8% increase compared with that of 2010 and exports of other Mine [Xstrata plc of Switzerland (50%) and Canadian unspecified industrial minerals and products decreased by 70.8% companies Goldcorp, Inc. (37.5%) and Yamana Gold (12.5%)]. to $36 million compared with that of 2010 (Instituto Nacional Gold mine output decreased by 6.3% in 2011 compared de Estadística y Censos, 2012b, p. 223). with that of 2010 to about 59,140 kilograms (kg) because of Argentina’s imports of coal and peat increased by 33.8% to decreased production at the San Jose Mine [Hochschild Mining $439 million compared with that of 2010 and imports of crude plc of the United Kingdom (51%) and McEwen Mining Inc. petroleum and natural gas increased by 213% to $2.5 billion. of Canada (49%)]. Production levels of construction materials Compared with that of 2010, the country’s imports of metallic and industrial minerals varied. Fluorspar production increased minerals increased by 45.6% to $1.3 billion; imports of stone, by about 42%, which may in part have been owing to increased sand, and clay increased by 10.3% to $31.2 million; and imports production of aluminum semimanufactures and iron and of other unspecified industrial minerals and products decreased steel products, as Aluar and Siderar S.A.I.C. acquired fluorite by 64.1% to $25.1 million (Instituto Nacional de Estadística y products for manufacturing from Fluorita Cordoba S.A. About Censos, 2012b, p. 223). 1 million meters (m) of exploratory drilling was reported for the year in the country compared with about 700,000 m in 2010 Commodity Review (table 1; Aluminum International Today, 2011; Goldcorp Inc., 2011, p. 5; Fluorita Cordoba S.A, 2012; Minera Andes Inc., Metals 2012). Aluminum.—Aluar was Argentina’s only primary Structure of the Mineral Industry aluminum producer. The company had expected to produce 475,000 t of aluminum products in 2011 but fell short because The mineral industry in Argentina was composed of domestic of a production shutdown after heavy rain and a landslide in and foreign private and public companies. Table 2 is a list of the November that resulted in flooding of electrical cabinets and country’s major mineral industry facilities. a loss of power to the smelter facility. The extent of the power outage was unclear, but the company produced 432,000 t of Mineral Trade aluminum in 2011, which was just 5.5% below the company’s Argentina was a net exporter of goods and services in 2011. recently increased capacity of 455,000 t and about 9% below The value derived from all exported goods increased by 22.2% the target for the year. Aluar’s aluminum reduction plant, which to $84 billion compared with $68.2 billion in 2010. Brazil housed 784 electrolytic pots and two semifabricated products was the leading recipient of Argentina’s exports, in terms plants, were located in Chubut Province.