Another Canadian miner has pulled back from investing in Argentina fearful of the latest moves from a growingly populist government and not so clear rules for the mining industry.
Cameco Corp., the world's largest publicly traded uranium producer, said on Monday it ended a joint-venture exploration project with partner Calypso Uranium Corp. as it was about to enter its third year.
The project did not represent a major cash commitment to Cameco – some 3 million dollars per year for three years to earn a majority stake – but it comes at a time when mining companies are nervous about committing new capital to Argentina, where the government of President Cristina Fernandez, elected to a second term by a landslide in October, is intervening the economy in a bid to stem capital outflows and bolster the market.
In April, Cristina Fernandez ordered the expropriation of partially state-owned energy company YPF from Spain's Repsol, a move that drew the rebuke even of the World Bank president, who called it a mistake.
Miners are reassessing investments in Argentina’s massive gold, copper and other resource deposits, spooked by populist measures such as the YPF expropriation, the forced repatriation of mining export revenue on local markets and requirements for companies to source equipment domestically.
Calypso, in a media release, stressed that Cameco ended the partnership due to a strategic shift, and not because of problems related directly to the company, its personnel or projects.
“Calypso has been advised the decision is in no way a reflection on Calypso … but is fundamentally a strategic shift in the region and projects where Cameco will focus their exploration efforts,” Calypso said. “Cameco will retain no interest in Energia Mineral [Calypso's wholly-owned Argentine subsidiary] or its properties.”
Cameco spokesman Rob Gereghty said the move reflected the company's focus on exploration in the four key regions – Canada, the United States, Kazakhstan and Australia – where Cameco has some 70 exploration initiatives.
Saskatoon-based Cameco entered the agreement with Calypso in late 2010, giving it the right to acquire a 51% interest by investing 9 million dollars over three years.
The moves could push Argentina onto a list of unfriendly jurisdictions for mining, like Venezuela and Bolivia, and drive investors away when the country is most in need of investment, experts say.