Argentina mining sector threatened by shortage of key imports, industry group says
8:56 pm Wednesday, November 09th, 2022
By Eliana Raszewski
BUENOS AIRES (Reuters) – Argentina’s mining sector could be forced to shut if the government does not remove barriers to importing key supplies, the country’s CAEM mining chamber said on Wednesday.
Falling international metals prices and higher costs are also weighing on mining projects, according to the chamber, which blamed the government for delays in regulatory authorizations, including for SIRA and SIRASE permits, that would allow importers to access the official exchange rate.
The shortage puts at risk “production rhythms, with the possibility that this ends with a complete shutdown,” according to a CAEM statement.
The industry group emphasized that the mining sector needs guaranteed access to inputs like large tires for vehicles and specialized chemicals to keep producing, including for project expansions as well as new mines.
Argentina, South America’s second-largest economy, produces gold, silver, copper and lithium.
But the government, seeking to protect the central bank’s dwindling supply of U.S. dollars, requires importers obtain authorization to buy goods using the tightly controlled official exchange rate.
Argentina’s official exchange rate, hovering around 160 pesos per U.S. dollar, is much lower than multiple other government-approved rates or the parallel black market rate of around 306 pesos per greenback.
Argentina posted a mining sector trade surplus of $319 million in September as exports totaled some $367 million, made up of mostly gold and silver shipments, while imports for the month totaled just $49 million, according to official data.
The chamber added that the country’s mining industry is one of only three sectors that last year generated net hard currency for the central bank’s coffers, with mining exports this year worth an estimated $3.8 billion.
(Reporting by Eliana Raszewski; Editing by David Alire Garcia and Cynthia Osterman)
