The bilateral Mining Treaty between Chile and Argentina in 1997 helped promote some of the largest bilateral mining projects in the continent, notably Pascua Lama, which would have required a capital outlay in excess of $8 billion. Two decades later, most of these projects remain in limbo or have been definitely rejected due to community opposition, tax disputes between the two governments, and limited infrastructure.
Due to the historically lackluster progress of these endeavors, the mining community was understandably enthused earlier this year when BHP partnered with Lundin to develop the $5 billion copper-gold-silver project Filo del Sol. But many issues remain unaddressed:
- Binational mining projects between Argentina and Chile are likely to be located in areas where water is scarce. The limited water resources feed rural communities where agricultural activities are the way of life, which underpins social unrest towards binational projects. There is also widespread misunderstanding of the effects of Argentina’s Glacier Law and its effects on mining. How can miners manage water in the Argentina/Chile border to prevent depleting communities from this resource, and build synergies when conducting impact assessments between countries?
- Argentina and Chile share key railways that facilitate the transport of people and goods, notably the Transandine Railway and the Salta–Antofagasta railway. There are plans to build another line connecting Bahía Blanca in southern Argentina with the northern port city of Talcahuano, Chile to create a Pacific-Atlantic link. Is the availability of transportation infrastructure for mining in the Argentina/Chile border sufficient for natural resource extraction of this massive scale?
- At several sites in the lithium-rich provinces of Salta and Jujuy in Argentina, mining companies are exploring the use of solar panels to generate their own energy – a novel approach that would give companies independence from the national gas infrastructure and electricity grid. Using green hydrogen through electrolysis has also been floated as an environmentally friendly alternative, although in the border it is faced with inevitable water scarcity. How are miners currently addressing the need for reliable and competitively priced sources of energy?
Joined by a panel of experts, AMI’s John Price and Alejandro Álvarez covered this topics -in-depth during a recent AMI Mining Coffee Chat.
Please scroll below to view a video of the Chat, which took place June 7.
Contact us to find out how our mining industry intelligence services can help you weigh the risks caused by these changes, as well as to understand and mitigate other possible risks in Brazil or other mining jurisdictions.