Mining Projects in Argentina Riding On Presidential Election Results

Bloomberg reported that some of the world’s biggest miners are ready to spend at least $5 billion in Argentina pending the presidential election results in October that will likely influence mining restrictions put in place by current President, Cristina Fernandez de Kirchner.

As quoted in the market news:

Goldcorp Inc. (TSX:G,NYSE:GG), the largest gold miner by market value, billionaire Ivan Glasenberg’s Glencore Plc (LSE:GLEN) and Yamana Gold Inc. (TSX:YRI,NYSE:AUY) are among producers signaling new investments in the country if the next government is more receptive to the industry, according to the country’s mining association and provincial and company officials briefed on the matter.

President Cristina Fernandez de Kirchner restricted imports and repatriated export revenue since she was re-elected in 2011. She created currency controls that hurt international mining companies and led Brazil’s Vale SA (NYSE:VALE) to cancel a $5.9 billion potash project in the country. The main presidential candidates appear more amenable to luring foreign investment, according to Martin Dedeu, president of the Argentine Mining Chamber. Fernandez isn’t allowed to seek a third term.

“The three leading candidates are convinced about the importance of the industry,” Dedeu said by telephone from Buenos Aires. “Daniel Scioli has said mining should be an engine for the economy, Mauricio Macri has been consistent in his support and Sergio Massa has said the sector deserves attention.”

Dedeu, who has met all the candidates, said the next president probably will lower mining taxes and gradually reduce currency controls including a ban on dividends going offshore.

A slump in crude prices is making resource-rich provinces in Argentina more open to mining projects to compensate for declines in energy revenues.

With an expected loss of 1.2 billion pesos ($135 million) hydrocarbon royalties this year, Chubut province is considering reopening talks with Pan American Silver Corp. with a view to resuming development of the Navidad silver project, said a government official who isn’t authorized to speak publicly.

Click here to read the full Bloomberg report.