By Amanda Barnes for Wine-Republic.com
Mining is a hot topic in Argentina. Amanda Barnes interviews geologist Bruce Smith to learn just what all the fuss is about.
Most people know that Argentina is literally sitting on a gold mine. With a wealth of mineral resources below its feet, a surplus of uninhabited land and more than a handful of willing foreign investors, much of the mining world is frustrated to see this pot of gold (and silver, copper and the rest) go relatively untapped.
But with strong environmental opposition and messy politics, will Argentina's treasure chest remain firmly buried underground? We speak to New Zealander geologist, Bruce Smith who has been living in Mendoza, trying to tap into Argentina's unexplored natural wealth for 3 years - to find out what it is all about.
So what exactly is Argentina sitting on?
Argentina has phenomenal mineral resource potential. It could be a wealthy country for its mineral resources, and it has huge potential to develop. But it hasn't developed a great resource industry yet, because the politics are complex and it doesn't have a strong tradition or culture of mining. Below the Andes there are huge copper deposits; from the Chilean side they produce 40% of the world's copper (which puts them well ahead of any other country; the next biggest producer only achieves 10%). Argentina shares the Andes with Chile, yet it doesn't even make up 1% of world production and so far there is only one copper mine in the country [Bajo de la Alumbrera in Catamarca]. Mendoza has the San Jorge copper and gold deposit with a total metal value in excess of $10billion ($US) that has already been explored and may go into production. Chubut has the world's largest unexploited silver deposit (Navidad), worth about $40 billion ($US). That one deposit alone contains half the national public debt value in silver. Argentina has a huge potential in minerals. It has the potential be in the top 5 minerals producers in the world.
Wow, that is a lot of money! Where would it all go though? Would Argentina and the communities benefit or just the mining company?
Mining produces jobs (lots of them and very well paid), tax and royalty revenue for the states, infrastructure investment and community development. The state owns the minerals. Landowners own the land. A mining company needs to have agreements with the government, with landowners and with the local community to mine. Some people say that national companies should be the only ones to produce so the benefits remain solely in national hands, but they rarely have the resources or expertise. Mining is a business. There are not many national governments that get involved with exploration and production. Exploration is a very high risk process, 99% of exploration projects fail. Mining is a business that government should regulate and administer, set standards for tax and royalty payments, but not risk taxpayer's money to find or develop mines. Australia and Canada are very wealthy from mining but the government is, not miners. If you look at many of the richest countries in the world – they are built on mining. In South America for example, Chile and Brazil are the richest per person, and both are mining countries. When Chile had the big 2010 earthquake President Piñera thanked all the international offers of aid money, but declined, saying that the country would rebuild using its copper resources.
If there is this much potential, why aren't more people mining here?
There has been mining throughout the history of Argentina but on a limited scale. The military government...Read Full article
