Affects American Barrick
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UPDATE 1-Argentine lawmakers pass glacier law to curb mining
Thu Sep 30, 2010 3:28pm GMT
Senate narrowly approves glacier-protection law
* Accepted lower house reforms that make law stricter
* President has said will not veto mining measure (Adds comments from lawmakers, Barrick Gold, share price)
By Luis Andres Henao and Helen Popper
BUENOS AIRES, Sept 30 (Reuters) - Argentina's Senate passed a law on Thursday that curbs mining on the nation's glaciers to protect water supplies, a measure praised by environmentalists but criticized by industry supporters.
Senators approved the law 35 to 33 after hours of debate, eventually agreeing to changes made in the lower house that pro-mining provinces had opposed. [ID:nN11246097]
President Cristina Fernandez has indicated she will sign the law this time around after vetoing a similar measure two years ago on the grounds it would hamper growth of provincial economies. That decision angered environmental groups.
"This vote cut across all party lines and I think we passed the best proposal," ruling party lawmaker Miguel Pichetto told local radio, adding that he expected Fernandez to sign the bill into law promptly.
One of the country's main mining chambers has warned the law could hinder projects run by the world's biggest gold producer Barrick Gold Corp (ABX.TO: Quote).
The law, which also bans oil drilling on the country's glaciers, aims to safeguard freshwater reserves. It sets standards for protecting glaciers and surrounding areas and penalizes companies that pollute or damage ice fields.
"Water is a human right, gold is not," Sen. Daniel Filmus, one of the bill's backers, told Reuters in a recent interview. "If any of these mining projects includes work on glaciers or surrounding areas, it will be banned outright."
Analysts say it could make it more expensive or even impossible for Barrick to develop the huge Pascua Lama site high in the Andes, although the company says the ore body it has permission to mine does not lie under a glacier. For an analysis see [ID:nN17233873]
"We do not mine on glaciers, and in fact, Barrick has already implemented a comprehensive range of measures to protect them as well as other sensitive environmental areas around both the Veladero mine and the Pascua Lama project," company spokesman Rodrigo Jimenez said in a statement.
"We will continue with our normal activities and comply with the applicable legal framework," he added.
Barrick's shares were trading slightly lower than those of other gold mining companies in Toronto, falling 3.2 percent to C$47.00 at 1512 GMT.
Barrick says it has already committed over 25 percent of the capital for Pascua Lama, with the project's pre-production capital budget estimated at $2.8 billion to $3.0 billion.
Pascua Lama straddles the Argentine-Chilean border and is located in Argentina's San Juan province. Barrick's Veladero mine, also in San Juan, produced 611,000 ounces of gold in 2009.
Mining-friendly provincial governments such as San Juan might try to challenge the law in the Supreme Court, arguing they have the right to decide how to manage their natural resources. (Factbox: [ID:nN17129548] )
Constitutional experts say the law could trigger a lengthy legal battle that could disrupt or end Barrick's plans. They say the company also could eventually seek compensation.
Anti-mining sentiment is strong in the South American country, making the debate over the glacier law a sensitive political issue a year from the next presidential election. (Reporting by Luis Andres Henao and Helen Popper; Additional reporting by Jorge Otaola and Cameron French in Toronto; Editing by David Gregorio) |
