ARGENTINA

ARGENTINA

Argentine province votes to ban open-pit mining

9th March 2007

BUENOS AIRES (Reuters) - Lawmakers in the northern Argentine province of La Rioja have banned open-pit mining in the area, where Canada's Barrick Gold Corp. has been exploring, a local mining official said on Friday.

Argentina's fledgling mining industry is attracting increasing investment from foreign miners but the metals boom faces strong opposition in some areas from local groups that are concerned about its impact on the environment.

Late last year another Andean province, Mendoza, voted to suspend the issuing of new permits for open-pit mining, though the measure was later vetoed by the provincial governor.

"We're a poor province, not like Mendoza ... and this law threatens our economic development," said Abel Nonino, under-secretary for mining in the province, adding that he had not yet seen the text of the legislation. He said the government would fight the ban.

La Rioja is currently gripped by a political conflict between the provincial governor -- a former mining secretary in the central government -- and his deputy, and the mining issue has been central to the crisis.

Local media said the mining legislation passed late on Thursday would be put to a referendum vote on July 29 among residents of the communities of Famatina and Chilecito, which lie close to the site explored by Barrick in a joint venture with Yamiri Gold and Energy Inc.

Barrick spokesman Vince Borg said the Famatina exploration project was not a top priority for the company in Argentina, where it operates the Veladero mine and is developing the vast Pascua Lama mine, which straddles the Andean border with Chile.

"It's at the very early stages, it's not a priority project for us in a global context, or even in the context ... of Argentina," he said, declining to comment further before seeing the details of the legislation.

On its Web site, Barrick -- the world's biggest gold producer -- says a drilling program has been carried out at Famatina and that follow-up work was planned for this year.

Ricardo Gaitan, a member of anti-mining group Citizens for Life, said campaigners have long called for a law banning mining in the area.

"I think the first step is that the law's in place and that we have to know in what terms it has been passed," he told Reuters by telephone late on Thursday.