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The trap and the macro slow down the expansion of mining companies

2023-05-22T23:59:21.717Z

Highlights: Argentina is at the door of a great mining development, but it runs into an obstacle: the disorder of its macroeconomy. Lithium, copper and gold projects. A global scenario that favors mineral resources, which are used in renewable energies and electric cars.Companies are optimistic about the geology, and the will of the governors. But they say they need more dollars available, to import and turn, in addition to an orderly macro and taxes that do not change. The idea of a "lithium triangle" with Chile and Bolivia is beginning to be discarded.


Companies are optimistic about the geology, and the will of the governors. But they say they need more dollars available, to import and turn, in addition to an orderly macro and taxes that do not change.


Lithium, copper and gold projects. A global scenario that favors mineral resources, which are used in renewable energies and electric cars. A neighbor -Chile- that has already demonstrated a great performance in the matter -with exports of US $ 45,000 million-, but that now seems to be going out of fashion. Argentina is at the door of a great mining development, but it runs into an obstacle: the disorder of its macroeconomy.

That was the main conclusion of a meeting of governors, officials and businessmen, this Monday, at the Arminera exhibition, in La Rural.

The governor of Jujuy, Gerardo Morales, was the first to enable the claims "The first thing the next government has to do is order the macro, without a plan that establishes clear rules, only small projects can be carried out," he said in a panel with other leaders (Raúl Jalil, from Catamarca and Gustavo Saénz, from Salta). It cannot be done with "permanent rule changes," Morales said.

The president of Jujuy added: "We must order the macro, the public accounts, and go towards the unification of the exchange rate. This can take a year, those who say they are going to do it immediately are lying," he said, in what appeared to be a criticism of his allies in Together for Change who are not supporters of gradualism or Javier Milei.

The businessmen verbalized the existing problems: "The obstacles in the outflows of resources, the exchange rate gap, which slow down imports, but also subtract exports and take resources away from the operation and its years of useful life," said Marcos Álvarez, of Barrick Gold.

"Argentina always looks at its short term. Tomorrow's Central Bank reserves. The way to approach mining development is with a long-term perspective," added a businessman who asked not to be identified. "We already export almost US$ 4,000 million annually in mining. There are investment projects going around of sidereal amounts. And they will materialize when the country does not have stocks, or those regulations that only exist here, "he said.

The idea of a "lithium triangle" with Chile and Bolivia is beginning to be discarded. Chile is in a process of nationalization of lithium, and Bolivia shows macroeconomic problems. "We must take the previous path of Chile, which came to have 130 free trade agreements, while today we do not exceed 30," Morales criticized and praised in the same sentence.


There are 6 lithium projects under construction and three in an advanced state. It is estimated that the market for this product will multiply by seven in the next 5 years.


"In lithium, Argentina has a unique geology with a product that has global demand. Lithium will be used in the decarbonization of the world and in the electrification of transport," according to Martín Pérez de Solay, CEO of Allkem Limited, which has just starred in a merger with another American one. "You have to sort out the incentives. Chile does not attract lithium. Argentina has better conditions to generate development."


Copper is the main transmitter of energy. Its use will intensify as it becomes electrified. "There are 25 or 26 million tons of copper. 50 million are needed by 2035," said Alfredo Vitaller, vice president of Corporate Affairs for Proyecto Josemaría.

"There are 5 staggered works projects, because there is no infrastructure to do them all at once," he explained That development is in San Juan. It will demand between $4 billion and $000 billion, according to its executives. "We are going to generate $5.000 billion per year, for 1 years," he said.


"Australian companies see the geological potential of the country. They are already investing in Argentina and they are going to invest more," said Sebastian Rendina, director of business development at the Australian embassy in Argentina. It also says that they are taking steps to unblock the entry of imports, necessary for the production that will generate exports. Firms from that country that are in Chile and Peru, now believe that it is time for Argentina.



Source: clarin

All business articles on 2023-05-22

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