Argentine Provinces Execute Federal Mining Agreement

On February 15, 2012, the Provinces of Jujuy, Salta, Catamarca, La Rioja, San Juan, Mendoza, Neuquén, Río Negro, Chubut and Santa Cruz launched a program to promote the mining industry in a socially and environmentally sustainable fashion. On that same date, said provinces formed the Federal Organization of Mining States (Organización Federal de Estados Mineros or “OFEMI”).

On March 27, 2012, acting as OFEMI, the above-mentioned provinces subscribed to the “Federal Agreement for Mining Development” whose main purposes are the following:

1. Effect a nationally-agreed on mining policy, acknowledging Provincial domain over mineral resources, as well as competence to administer them.

2. Appoint OFEMI as consulting agency in the drafting and execution of National mining policies.

3. Provide production structures to the provinces, enhancing their resources.

4. Establish communication mechanisms between Provincial and National authorities and coordinate environmental protection actions with organizations.

5. Assimilate economic activity with the local inhabitants’ cultures.

6. Make endeavors for Provinces to gain participation in mining income through state-owned or mixed-capital companies.

7. Set up funds to develop infrastructure through the National and Provincial Governments.

8. Create a setting favorable to effect state policies allowing for: (a) social and public involvement; (b) development of strategies for public debate among the different sectors; (c) development of joint strategies to set a minimum standard of environmental and economic requirements; (d) support for the adjustment of mining regulations to new exploration and development technologies; (e) endorsement policies aiming to obtain social approval for the development of mining activity; and (f) setting of mechanisms to improve reporting on mining activity, among other.

The Federal Agreement for Mining Development provides for its immediate effectiveness and summons all Argentine provinces to become a party thereto.

At a moment when mining is under constant criticism, which makes its way through society’s general misinformation on the importance and benefits of this activity, this initiative by the provinces holding greater mineral resources is most significant. It is even more significant when considering that the same provinces which, shortly before, blocked mining development in their territory, have now joined this initiative.