Thoughts on Argentina's "Glacier Law" (from IKN74)

This was one small section of yesterday's IKN Weekly issue 74 and considered the passing of the so-called "Glacier Law" by Argentina's Senate last week. As usual in the 'Regional Politics' section of the weekly we try to cut through the debate and handwringing and get to the practical points that concern mining sector investors

Argentina’s ‘Glacier Law’ passes the Senate

On Thursday Argentina’s upper house, the Senate, finally voted through the so-called “Glacier Law” that’s designed to protect glaciers in the upper reaches of the Andean Cordillera and stop mining companies from disrupting them, thus guaranteeing them as a source of water supply etc. There were two law projects on the table for the Senate to vote on and the tougher-worded one of the two was passed by a vote of 35 to 33 (one abstention). Below in the appendix find a Reuters report (18) that neatly sums things up.

The practical results of the law passage (assuming President Cristina Fernandez signs it into law as she said she would) are currently under debate, with some saying the feature ‘Pascua Lama’ project of Barrick is under threat, while others saying no. So let’s make this as simple as possible: If this law threatens ABX at Pascua Lama in any way, be sure that Cristina will veto it. It’s really as simple as that. Fernandez is very pro-Pascua Lama, Barrick has already made provisions to its mining plan that mean Pascua Lama mineral directly under the nearby glacier will not be mined or even put in the mining plan and the talk from the environmental groups of this law being a triumph that will stop Pascua Lama in its tracks will be short-lived. The mine will happen, period.

However, the new law is likely to add an extra layer of bureaucracy (as if there weren’t enough already in Argentina) to other projects in the upper reaches of the Cordillera. One of the key points of the law is that Argentine Institute of Snow Research, Glaciology and Environmental Science (translated) is now in charge of making a nationwide inventory of glaciers and afterwards it will also be in charge of making the glacial studies needed for environmental permitting for any new mining project. In other words a new department is now involved in the permitting process, over and above all the current processes.

The bottom line is that 1) ABX will get its mine at Pascua Lama but 2) there may be a temporary delay or two due to it. Meanwhile 3) Argentina, already a pain in the butt when it comes to red tape, just saw another layer added to any company that wants to develop a high mountain project.