Latin America’s political shift to the Left is starting to have serious consequences as far as mining companies are concerned. In April the Argentine government renationalised the oil company YPF, and early last week introduced a new law aimed at reducing mining companies’ imports into Argentina.
Last year foreign investment in Argentina’s mining sector almost reached a new record of $3 billion, but this new law calls into question future investment. This new decree means that the government will start to control all imports by mining companies, in an effort to boost Argentina's foreign currency reserves and its trade surplus.
From now on, mining companies will need official approval in order to import goods required for the exploration and production of resources. Furthermore, imports will have to be reported to the authorities three months ahead of ordering. According to Argentina’s president Christina Kirchner, this is aimed at “protecting” local industry. As a result, local mining companies will be required to acquire their equipment from Argentine manufacturers – if possible.
It hasn’t taken long, though, for voices to be raised against this measure. The European Union has filed a claim at the World Trade Organisation (WTO), as this law follows on from aggressive expropriation moves by Kirchner's administration last year. Sadly for mining investors, this is not likely to be the last such move by a Latin American government.
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Argentine Government Moves Against Miners
Published 06/05/2012, 07:37 AM
Updated 05/14/2017, 06:45 AM
Argentine Government Moves Against Miners
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