Argentine Province Halts Mining On Pollution Fears

ARGENTINA

Argentine province halts mining on pollution fears

By Helen Popper

14th December 2006

BUENOS AIRES, Argentina - Lawmakers in an Argentine province famous for its wine and ski resorts have suspended all open-pit mining due to strong environmental opposition, deputies and industry sources said on Thursday.

The western province of Mendoza is synonymous with Malbec vines grown in the plains below the Andes, but rising metal prices have generated increased interest in its mining potential and in turn fueled anti-mining protests.

At a session on Wednesday, the province's parliament voted to suspend open-pit metals mining indefinitely because the local government had failed to meet a 30-day deadline to draw up a plan to safeguard the environment from mining projects.

"The people of Mendoza are learning lessons from other parts of the world where environmental issues haven't been addressed with the seriousness and prudence they deserve," said Diego Arenas, a Democratic Party deputy, adding that the ban would last until an environmental plan was in place.

He told Reuters the province's dry climate and its key agricultural sector, which also involves fruit farming and olive oil production, made it particularly important to protect water supplies from pollution risks.

Mining is not widely developed in Mendoza, and industry leaders say the ban could mean the province gets left behind from the country's minerals boom as neighboring provinces work to attract foreign investors.

"The saddest thing for me in all this is that we really don't know Mendoza's mining potential," said Roberto Zenobi, head of the provincial mining chamber, branding the law "unconstitutional."

"This act of ignorance by our lawmakers stops companies from exploring -- we're banning an activity without knowing if we have mineral resources worth exploiting," he added, saying the provincial governor might still veto the law.

MINING BOOM

Argentina is not known as a mining country. But investment in the sector has boomed in recent years, driven by higher global prices and lower costs since the peso was devalued sharply against the dollar during a 2001-2002 economic crisis.

Copper and gold are among the South American country's biggest mineral exports and official figures predict investment in the sector will top $6 billion between now and 2010.

The boom has provoked several protests by local and environmental groups opposed to mining projects, although Mendoza is the only province to pass such a far-reaching law. The mining chamber's Zenobi said two small metals projects were currently in the feasibility stage in the province. They are the La Cabeza gold project, where drilling is currently being done by Canada's Exeter Resource Corp. and the San Jorge gold and copper site, controlled by Vancouver-based Global Copper Corp.

He said the new law should not in principle affect the $735-million potash mine the world's No. 2 miner Rio Tinto expects to start work on in 2007. No one from Rio Tinto could immediately be reached to comment.

Mining opponents in Mendoza are most concerned about metals mining, fearing the blasting and chemicals used could pollute water supplies.

Ricardo Schkop, of the Southern Multisector group that includes farmers, said he had no problem with quarrying and non-polluting mining.

"We're not so Utopian that we think we can live without mining," he said. "(But) to allow the dynamiting of two or three mountains to extract a kilo of gold is an extreme."