Mining Industry in Argentina

Argentina is one of the last mining frontiers worldwide, with only a small part of its geological potential developed, a few more than two decades of developing and several productive centers; Argentina has covered an important path that had put it among the best mining destination of the world.

Argentina offers Gold, Silver, Copper, Zinc, Lead, Molybdenum, Iron, Lithium, Potassium, nuclear minerals, rare earth metal, and a diversified resources, emphasizing that more than 70% of its potential is unexplored yet. The mining industry in Argentina is young; it has a long path to walk and great exploration potential.

With a world that grows and changes fastly, Argentina is becoming a supplier of the most necessary goods: food and minerals. Mining industry has been a development key for local economies in Argentina.

With a combined investment of over U$S25 billion since Alumbrera´s production beginning, it was the first example of the “New Argentine Mining”.  A similar amount is expected to be invested in next years.

Several factors has combined to turn Argentina into a mining investment destination, such as geological potential, attractive laws for mining investments, good infrastructure for mining development, qualified human resources, a consolidated net of suppliers of goods and services.

In the north (Salta, Jujuy y Catamarca provinces) there are a number of salars that, with Chile and Bolivia, has created the so called “Golden Lithium Triangle” which hosts more than 75% of this mineral´s world reserves. The first example of lithium production in Argentina has been producing for two decades: Salar Del Hombre Muerto (Catamarca Province, operated by FMC Lithium – U.S.A.), Olaroz has started operations (Jujuy Province operated by Orocobre – Australia). Others projects are Cauchari – Olaroz (Jujuy Province, operated by Lithium Americas – Canada and SQM of Chile), Sal de Vida (Catamarca Province, operated by Galaxy – Australia) and Cauchari (Jujuy Province, operated by Advantage Lithium). Salar Del Rincon (Salta province, operated by Enirgi Group – Canada), 3Q (Catamarca, operated by Neo Lithium – Canada), Sal de los Angeles (Salta province, operated by Lithium X – Canada) Also, there are other lithium projects in less advanced development. Why is Argentina`s lithium so attractive? Most important, its production comes from brines and this means a lesser cost in comparison with lithium coming from rocks (USA, Australia and China), adding more competitive and comparative advantages respect to Chile and Bolivia.

In Jujuy Province, the Bolivian tin belt gets Argentina, with important examples like Aguilar Mine (lead and zinc – operated by Glencore- Switzerland) and Pirquitas mine (Silver Standard – Canada), one of the biggest silver producers of the world. The LOM of this undertaking will be extended by the reception of mineral extracted from Chinchillas. Silver Standard and Golden Arrow Resources have created a Joint Venture to advance in the development of this project, using Pirquitas’ infrastructure, thus slashing the time to production and the capital expense required.

In Salta Province, and with a great correlation with the Chilean geological belts, there are important copper deposits like Taca Taca (operated by Lumina Copper – Canada), which requires an investment of at least U$S 3 billion: this giant would begin construction in 2018, as First Quantum told the provincial authorities. Fortuna Silver –mine operator in Mexico and Peru- acquired Goldrock Mines, the company that developed Lindero gold project during two decades. There is hope that Fortuna’s financial muscle will begin with the construction of Lindero in the near term.

In Catamarca Province, and only 35 km away from Bajo la Alumbrera, there is an important copper – gold deposit: Agua Rica (Operated by Yamana Gold – Canada). It is a world class project, with highly mineralized tonnage). Yamana Gold is looking for investment in order to continue the production in Bajo la Alumbrera or to build a new mine for Agua Rica production. Recently, the company announced its intention to advance on studies in order to analyze the viability of a potential underground operation.

Gold production comes principally from north of San Juan Province, more specially the Valle del Cura region, with Veladero mine (operated by Barrick Gold – Canada). In San Juan province there are two more gold mines: Gualcamayo (Yamana Gold – Canada) and Casposo (Austral Gold – Australia). Yamana is analyzing a possible extension of Gualcamayo, while Austral Gold –part of Elsztain group- has made a total reconversion of Casposo after it acquired it from Troy Resources.

Located in the northern area of the province of San Juan, Constelación, a cluster formed by the Josemaría (San Juan province) and Los Helados (in Chile) projects, boasts significant copper and gold mineralization. Conceived as a binational project shared with Chile, the Canadian junior company NGEx Resources has set up an endeavor that is poised to be one of the greatest national and regional players in the following decades. Not far away, Filo Mining advances in another promising project: Filo Del Sol.

San Juan Province hosts World class copper deposits: El Pachón (Glencore – Switzerland), Los Azules (McEwen Mining – Canada) and El Altar (Sibanye Gold – South Africa). All of them will become Argentina an important copper producer. These projects will need an investment over U$S 20 billion.

More to the south, in the Mendoza Province, the Potasio Río Colorado project is considered one of the largest deposits of this mineral, which is an important nutrient with destination to emerging markets. The project’s operator, the Brazilian Vale, together with US-based Mosaic, the firm that bought Vale’s fertilizers division, have undertaken a general review of the project. A final decision on its future is expected in the next few months.

Argentina has a strong potential related to nuclear minerals: Cerro Solo (Chubut Province – Atomic Energy National Agency), one of the most important uranium deposits in the world, with over 5,500 tonnes in resources (U308).

Finally, in Santa Cruz Province (Patagonia region), the so called Macizo del Deseado geologic formation hosts high grade gold and silver mineralization, with operating mines like Cerro Vanguardia (Anglo Gold Ashanti –South Africa), Cerro Negro (Goldcorp – Canada), Manantial Espejo (Pan American Silver – Canada), San José (Hochschild Mining  – Peru), the building of Don Nicolas Project (CIMINAS) and Cerro Negro (Yamana  – Canada), along with the fast development at La Josefina (Hunt Mining – U.S.A.) reinforced by production recently started at Martha mine. Pan American Silver acquired COSE and Joaquin projects in order to process its mineral at Manantial Esepejo’s plant. Meanwhile, in Rio Negro province, Patagonia Gold –an Argentine junior mining company- acquired Calcatreu project to develop it.

Argentina has developed an important number of entrepreneurs, which have grown alongside the mining activity. The success of these medium and small companies is shown by the fact that they bring competitive solutions in goods and services, but not only in Argentina: They have crossed the borders, working in consolidated countries like Chile and Peru.

Argentina is one of the last mining frontiers worldwide, is a TOP 15 exploration destiny, competing with countries with mining tradition.