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1/22/18

Argentina and the Chubut mining detente: Good for PAAS and Navidad (from IKN453)

You're going to have to be selective, as the sudden thawing in anti-mining attitude in the province of Chubut in Argentina willnot apply to those projects to the West near the Andean Cordillera. However, those in the C-Suite at Pan American Silver (PAAS) must be more optimistic about Navidad's chances than they've been in years. The following a segment from IKN453, out Sunday evening.

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Argentina: There’s a chance for Navidad in Chubut
Much to my own surprise, there’s a sudden thawing to the idea of mining in the Chubut province of Argentina and if things go well for the national government’s argument, the principal beneficiary will be the Navidad silver/zinc/lead project owned by Pan American Silver (PAAS). 

The reason for this potential détente is new governor Mariano Arcioni, who in the last two weeks has made noises (21) about being open to the idea of a “debate about mining” in the province, as well as suggesting that the province’s legislature look into the possibility of modifying the current law on mining in the region (specifically, law 5,001 Article 2 to which we’ll get in a moment). And according to the very interesting article I stuck up on the blog last week (22) this all started when Arcioni went to Buenos Aires in his first trip as governor (after the death of Mario das Neves) along with nearly all other provincial governors. At the lunch they had, President Macri made a point of sitting next to Arcioni and, according to that report, at one point whispered to him “I want Navidad”, a clear reference to the PAAS project (and while we’re here, note that Ross Beaty and Mauricio Macri are personal friends…helps).

This conversation has continued since then between the two and now we have a governor who wants the matter to go to a public debate and even a referendum. The problem with the Chubut law is that there is a clear majority against mining and therefore changing the law for the whole province, but now Arcioni is proposing a get-around using the idea of “Zonification”. In essence simple, he proposes that each region inside Chubut decide whether they want or do not want mining in their area. This is good news for Navidad, because though the larger population centres to the Atlantic East coast and the Andean Cordillera West are firmly against mining activity (e.g. Yamana at Suyai still doesn’t stand a chance, neither do those silly uranium project pumpers like UWE.v, see the Esquel political declarations about how “mining would be unthinkable” in our area right here (23)) the central plateau region wants (as a majority) the Navidad project to happen (jobs, activity, growth etc). Therefore if (repeat IF) Chubut has some sort of vote and law change to allow mining to happen in specific zones, PAAS will be very happy.

This is by no means a done deal yet, for one thing the anti-mining groups in Chubut are already saying that it’s not just the law that has to change but the provincial constitution (a tougher one), but there’s certainly a crack in the door here.