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What will a Scioli presidency mean for mining in Argentina? (from IKN323)

While the blog normally takes the...errr...light-hearted (?) direction on covering the mining industry and/or the Latam region, this is the type of stuff that happens over at the Weekly. The following is two pages from yesterday's 33 page edition.


What will a Scioli presidency mean for mining in Argentina?
We've talked a lot about how Argentina's current FpV government's candidate Daniel Scioli is now hot favourite to take over the job from his current boss and President Cristina Fernández de Kirchner (CFK) when the big election happens in October (with only Mauricio Macri standing in his way). All polls point to a Scioli win as the most probable outcome at this stage, with some now showing that he may even win it in the first round of voting. But what we haven't done much of yet is what it might mean for the mining sector of Argentina (which is our real focus here at The IKN Weekly). In fact I've been holding off a while and waiting until this weekend to do just that, because Scioli had a long-standing date on Friday at which he was expected to make a few formal statements on his position vis-a-vis mining in Argentina. The event went off as planned, he deliver the soundbites, here we go.

Here's a Youtube (16) of Scioli's press conference at the International Conference for Mining and Sustainable Development, held in San Juan on Friday July 17th. Those who know their Argentina political faces will also see that Scioli's Vice-President ticket candidate, Carlos Zannini, and the powerful current Minister of Planning Julio de Vido, as well as San Juan's outgoing (retiring) ultra-pro-mining governor Gioja are present at the table. Along with those more famous faces, also present were either the current sitting and/or incoming governors of the privinces of Jujuy (Eduardo Fellner), Mendoza (Francisco Pérez), Catamarca (Lucía Corpacci), La Rioja (Luis Beder Herrera and Sergio Casas), Neuquén, (Jorge Sapag), Río Negro (Alberto Weretilneck) and Tierra del Fuego (Rosana Bertone), provinces known collectively and loosely as "the mining provinces" in Argentina. There were a couple of mining provinces missing such as Salta, but be in no doubt that this was an important and carefully staged event that had Scioli and his policies on mining at its very centre. By the way, the whole shebang was organized by the "Argentine Development Foundation" (Fundación Desarrollo Argentino), which is headed by one José Scioli...yup you got it, Daniel's brother.

All those mentioned had a go at the microphone so if you want to get the info first-hand have at that Youtube link (all in Spanish, a chance to brush up on your Castilian with a Southern Cone lilt) but here are translations of what I consider to be representative quotes for your viewing pleasure (extra quote sources here (17) (18)):

·     Scioli: "Mining is capable of generating U$30Bn (of economic activity in Argentina) in the next four years, as well as hundred of jobs".

·     Scioli: "If I am made President, I will create a great development so that the millions of dollars that this activity attracts, as well as the great number of jobs it generates, arrive in Argentina."

·     Scioli: "I want you to know that our objective is to bring certainty, security, calm and prevision to business executives, that in Argentina they will have the necessary conditions to develop a sustainable mining industry."

·     Scioli: "Sustainable mining is part of the main agenda of national development and a fundamental pillar, the same as energy sovereignty, agriculture, science, technology and tourism. The great challenge that we have, along with my vice-presidential candidate, is to develop all the productive federalism (policies) while permanently looking for the best competitiveness."

·     Julio de Vido: "The aim for the year 2025, which we must launch now, is to double the number of jobs and mineral production in the country. Argentina has all the conditions needed (for mining) and reaching these goals depends on political policies to be implemented. For these we fully trust in Daniel Scioli and Carlos Zannini."

Plenty more like that if you care to listen to the presser. All very pro-mining for sure and I tacked that Julio de Vido quote on the end because it shows the active backing the present administration is giving to the Scioli/Zannini ticket. Also note how many times Zannini is mentioned, as he was handpicked by CFK as Scioli's running mate because of his hardcore Kirchnerist track record, as some of the true faithful in the FpV camp still do't trust the more moderate and Chameleon-like Scioli to maintain their preferred harder leftist political line.

As for content, that word "jobs" kept on coming up which is nothing but a reflection of the political campaign and its mechanisms. So yes, this was a carefully staged and scripted event but it's also the one where Scioli lays out his political agenda on mining and to be honest, the industry couldn't have asked for a stronger backing than it got. The keyword "sustainable" (i.e. environment, green, ecology, agro-fears) was used here and there but not to the extent that Rafael Correa (to choose just one example) leans on it in his speeches. The thrust was jobs and money and investment and stability and in my presidency we want mining jobs here in Argentina and jobs and money and jobs. Et cetera. But as a delegation from several Chambers of Mining noted in a letter they delivered to the brass at the conference (19) "...In Argentina, many of the difficulties that the sector faces result from a series of measures adopted by the State which have undercut the spirit of development and enterprise of the current Law of Mining Investment", which is a polite way that mining bizpeople have of saying that the government should stop meddling in the mining sector and sticking its oar in every five minutes.

At which point we face the practical reality of a future Argentina under President Scioli, assuming he wins in October (sidebar: from this point onwards and until otherwise mentioned, that's going to be my 2015 political assumption for the country as it's going to take a very big shift for any other result). The good news is that a Scioli government is making the right official noises and putting on its pro-mining clothes. It's also much keener in this electoral campaign season to push the idea of jobs/growth than it is all that tree-hugging enviro protection stuff, as Scioli's team has done its homework and know where the side net positive vote weighting lays.

The bad news is that the message may come with different words, but its substance is no different to that of the current CFK administration and we've seen how ineffective the national pro-mining policies are when they hit the barrier of regional provincial issues, politics and laws. Under Scioli we may get a feelgood honeymoon period for the mining industry as people talk up the positive talk from the country's new President and his possible move to a more moderate stance than CFK, but until/unless things change at a regional level, it's going to be the same selective mining quagmire as always.

Bottom line: Scioli's words on mining last week are welcome on these pages, he was as positive as we could have hoped. But regions will unblock Argentina's mining sector, not the national administration. We need to watch how the regionals unfold, that will be closer to October.