Mining: they demand access to foreign currency to unlock investments for US$2 billion

Franco Mignacco, president of CAEM, informed in his speech before a full audience the data of the activity: “We were one of the 3 sectors that, at the time of greatest need, generated foreign currency inflowstogether with agriculture and information technology, and to this are added contributions made to the State for $100 billion”. And he added what the projections are: “We have 13 metal mining deposits in production, the start-up of the most advanced projects would triple annual exports, reaching around US$10 billion”.

To give a dimension of the potential, he mentioned the data of Chile, which “with the same mountain range”, exported 20 times more, for US$ 62 billion in 2021, against US$ 3,200 from Argentina. “Can we really achieve this development? The answer is a resounding yes”, he said before the diners, among whom were dozens of businessmen, national and provincial government officials, and the ambassadors of the United States, Australia, Canada and Korea.

He even added that Argentina could enter the podium of the third largest producer of lithium globally (today in fourth place), due to the expansion of projects such as Olaroz and Mina Fénix, the entry into production of Caucharí Olaroz and the advances in Sal de Oro, Sal de Vida, Centenario Ratones, 3Q and Mariana. However, despite the fact that the country has the mineral resources and a favorable international context that increasingly demands more copper and lithiumMignacco assured that for this Argentina has to be “more competitive”.

Therefore, he mentioned the claims of the sector: “We continue to propose that withholdings must be reviewed, tending towards their elimination, to put us on a par with the countries that we compete in that do not have those burdens. Also access to the single, free-exchange market is essential, and review VAT refund regimes and guarantee imports of the inputs necessary for the production and construction of projects”.

Without naming him, Mignacco spoke of the project for an unexpected income tax: “Sometimes when initiatives arise to continue adding tax pressure, the effect it produces on the arrival of investments and how it impacts the useful life of projects is lost. It is something that we discussed with the authorities, whom I thank for their good predisposition.”

Later, in dialogue with journalists, Mignacco stressed that the expectations are that exports climb to US$4 billion in 2022, and investments of US$2 billion are reached in 2022. Although there were million-dollar investment announcements, some did not materialize, stopped before the definition of access to the dollar, the future of withholdings (due to a project of mobile withholdings that the Ministry of Economy is working on) and the implementation of the tax on unexpected income.

“It is an additional tax that does not encourage new projects to make their evaluations. There are companies that are returning to the country due to the political and social situation in Chile and Peru, we must take advantage of this opportunity. We have the expectation that mining will be exempt from the tax”, the president of CAEM told Ámbito. As this newspaper learned, mining companies could be left out due to how the tax is being designed.

Kulfas with businessmen

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After participating in the Amcham event, Kulfas attended Parque Norte to be present at the mining day celebration. In a lengthy speech, he assured that mining is “half machine” and on the contrary, he said that there is a hinge moment: “We are receiving investor interest like we haven’t seen in a long time. We have enormous potential for mining to be one of the levers of development in the 21st century.”

But I mention that one of the challenges is environmental: although he said that companies have “environmental standards above the average”, he affirmed that trust between citizens and the State must be improved. “We will reject any investment project that does not have the environment as a priority, and lacks interest in the development of local suppliers”he concluded.

During lunch, the speech was well appreciated by some of the participants, due to the boost given to the activity by a national ministry, and the initiatives launched, such as the virtual information system and the mining table open to the community, in which all the actors of the sector will be allowed to debate. The Secretary of Mining, Fernanda Ávila, and the new Undersecretary Pamela Morales, who replaced Andrés Vera after his departure, participated in the meeting. Morales worked in the Cabinet of Advisors Unit, which reports to Alejandro Sehtman, a trusted person of Kulfas.

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