MercoPress. South Atlantic News Agency

Argentine mining industry angry with change of rules

Argentina's mineral exports in 2007 fell 9.6% on the year in terms of volume but rose 22.2% in terms of value, according to a report from IES Consultores published in the Buenos Aires press. Exports last year were valued at 2.8 billion US dollars, with copper making up 62.6% of shipments, IES said.

Switzerland was the main market for Argentine mineral exports last year, purchasing 18.1%; Germany 15.5%; Japan 13% and South Korea 11.8%. Exports are expected to grow to 4 billion by 2010, IES said, based on government projections. Investment in the sector rose to 1.7 billion US dollars in 2007 compared to 200 million US dollars five years ago. However IES points out that the sector's prospects are unclear due to uncertainty regarding future metal prices and doubts over the regulatory structure needed for long- term investment. In December, customs agents demanded new taxes on exports of Rio Tinto PLC's ( RTP) Borax Argentina S.A., Procesadora de Boratos Argentinos S.A., Minera del Altiplano FMC and Xstrata PLC's (XTA.LN) Minera Alumbrera Ltd. The companies previously had received letters from the Mining Ministry certifying that they would enjoy tax stability for 30 years. Rio Tinto and Xtrata have filed lawsuits to block the imposition of the new 5 to 10% export taxes. The increased taxes and spread of laws blocking mining activity may reduce growth. The estimated 8 billion US dollars of investment between 2008 and 2010 forecast by the Mining Ministry may be reduced as a result, IES said. A number of Argentine provinces have recently passed laws banning the use of cyanide and other chemicals needed for feasible mineral extraction