Argentina: “Domino Effect” Feared in Withdrawal of Mining Company

The company claims that this “uncertainty” stems from conflicts regarding the low royalties and tax benefits offered to transnational mining companies: Tax breaks and exemptions guaranteed by the national government mean that highly profitable mining projects generate very little benefits for local provinces such as Salta, who suffer from poverty, lack of infrastructure and poor social services.

As a result of this conflict, provincial authorities recently eliminated a series of royalty exemptions for future mining projects. “We are not going to risk multimillion dollar investments, in the face of indifference on the part of provincial authorities,” said Graham Parsons, head of operations for Alexander Gold.

But environmental conflict and popular resistance to transnational mining projects are also at the root of this conflict. Residents of the region have carried out marches, demonstrations, conferences, and blockades demanding that provincial authorities deny environmental permits for the León copper mining project. At the center of their claims is the tremendous utilization and contamination of water resources by mining projects, a precious commodity in this arid region dependent upon agriculture. Salta residents fear that their province is to be turned into a mining “sacrifice zone.” Salta is under exploration by dozens of transnational mining firms, and government authorities, such as ex-mining minister Ricardo Alonso and national mining secretary Jorge Mayoral have made trips to Australia and Canada to sell Salta as a new mining hotspot for uranium mining.
In withdrawing, Alexander Gold fired all their local employees without warning or benefits, sending some twenty ex-employees to demonstrate in front of the local town hall in fear and desperation.

Alexander Gold’s Graham Parsons blamed local social organizations, especially VAPUMAS (Autonomously Organized Neighbors for a Healthy Environment) of Metán: “These people are feeding fear, saying terrible things, lies, exaggerations.” Alonso expressed fears that “the exit of Alexander Gold will have a domino effect in international markets: Other firms will see what is happening here and begin to leave form Argentina.”

That “exodus” of transnational mining firms from Argentina is exactly what a lot of environmental and social community groups are demanding. Residents of Salta are mobilizing now to add their province to the six Argentine provinces which have enacted prohibitions against open-pit metals mining projects.