Miners Receive Reprieve in Argentina's Mendoza Province
By Jon A. Nones
08 Jun 2007 at 04:11 PM GMT-04:00
resourceinvestor.com
St. LOUIS (ResourceInvestor.com) -- Argentina's Mendoza province lower house of congress has decided not to debate the executive veto of a bill to suspend open pit mining and exploration, and instead send it to other committees for consideration - a reprieve of sorts for miners exploring in the province.
Last week, the lower house of Argentina’s Mendoza overruled Governor Julio Cobos' veto of the bill and was scheduled to render a final decision on June 6. Of 34 senators put to the vote, 26 were in favour of nullifying Governor Cobos' veto.
This week’s decision to send the bill to the committees of environment, urbanism and housing, economy and legislation and constitutional matters, means that "now there is neither veto nor law," a spokesperson said.
Following evaluation by the committees, it is not sure the bill will change or even reappear. There is no specific deadline for voting to modify a law.
On December 13, 2006, Mendoza’s parliament voted to suspend all open-pit mining and halted issuing any new exploration and mining permits until the province passes a new environmental management plan. Then just one week later on December 20, Governor Julio Cobos vetoed the bill.
The Mendoza Province, famous for its wine making industry and ski resorts, has faced strong environmental opposition. In September 2005, the province passed a law trying to block exploration by Tenke Mining [TSX:TNK] on environmental grounds, and exploration was stopped for 90 days. However, analysts believe the new legislation is largely political.
Stephen Bailey, Senior VP of Frontier Strategy Group, previously told RI that the current problems in Mendoza stem from the struggle between local and central governments for control over mineral resources.
“The struggle is as much about controlling revenues from mining investment as it is about preventing mining projects from moving forward on environmental grounds,” he said. “Local governments are attempting to assert their control to improve their leverage in negotiating greater royalty and tax revenues from mining projects.”
Mendoza has two advanced gold-copper projects underway: Exeter Resources’ [AMEX:XRA; TSX:SRC] Don Sixto gold project, formerly La Cabeza, and Global Copper's [TSX:GLQ] San Jorge gold and copper project.
Exeter and Global Copper were originally thought to be the most impacted by the new legislation; however, neither felt any substantial repercussions from the previous news of the veto.
Today, Exeter is trading 12 cents lower at C$3.66 while Global Copper is down 5 cents at C$2.62 on the Toronto Stock Exchange, following weakness in the gold and copper markets.
Gold for August delivery fell $14.90, or 2%, at $650.30 an ounce on the New York Mercantile Exchange, extending its four-session losing streak of $26. July copper tumbled 11.50 cents, or 3.4%, at $3.2630 a pound.
Mendoza Province is also home to the Sierra Pintada uranium mine, which closed in 1995. The San Rafael facility continues operations on stockpiled ore, but its nominal production capacity of 120 tonnes per year is severely underutilised.
The World Bank is interested in financing the restart of the Sierra Pintada uranium mine, provided that a solution is found for the reclamation of the former operations. However, the wine producers of the San Rafael river basin are stringently fighting the move.
Comisión Nacional de Energía Atómica (CNEA) has opened an information centre at San Rafael to inform the public on the proposed reopening of the Sierra Pintada uranium mine. Mega Uranium [TSX:MGA] and Portal Resources [TSX-V:PDO] are currently exploring in the Sierra Pintada district for uranium, but face opposition.
Mega Uranium closed down 6 cents today at C$6.17 on TSX while Portal stayed even at 65 cents on TSX-V.
Trade Tech reports the uranium spot price to be $138/lb, up from $133/lb a week ago, while UxC puts the price at $135/lb.
Additional coverage by RI to come as these events unfold. See previous coverage for more in-depth analysis. |
