Argentina's Macri would give provinces more mining profits: adviser

Reuters News
Posted: Sep 23, 2015 6:46 PM

BUENOS AIRES (Reuters) - Argentina's leading opposition candidate Mauricio Macri would give provinces a bigger share of profits from miners operating there and improve environmental inspections in the industry, an adviser said in an interview on Wednesday.

Santiago Dondo, a mining specialist at Pensar, the think tank of Macri's business-friendly PRO party, said 80 to 85 percent of mining tax revenue currently goes to national coffers.

"If Argentine society and politicians do not understand where we are going with the mining sector, doesn't share that aim or want it, then it will be very difficult," said Dondo.

"The main challenge ... is to generate trust at home, which would also give investors stability."

Dondo said the federal government should take a more active role in coordinating environmental inspections by independent experts with the provinces.

A cyanide leak triggered by a faulty valve at Barrick Gold Corp's Veladero mine prompted an Argentine judge last week to order the preventative suspension of the gold leaching process there.

Normalizing the economy and improving the credibility of Argentine state institutions are also important for attracting greater investment in the mining sector, he said.

Macri, the conservative mayor of Buenos Aires city, is campaigning on a mandate to unwind unorthodox state controls on the currency market and trade that have stunted investment and stalled growth in Latin America's No. 3 economy.

"In a sector like mining which needs so much investment, so much capital, all the economic distortions like currency controls and uncontrollable inflation have a very strong and negative impact," Dondo said.

Earlier this month, an adviser for the ruling party's candidate Daniel Scioli said he would seek to increase investment in mining by ensuring tax stability for foreign companies eager to exploit Argentina's vast mineral resources.

Scioli is leading in polls but not by quite enough of a margin to avoid a second-round runoff with Macri in November. Analysts said a run-off could go either way.

(Reporting by Juliana Castilla; Writing by Sarah Marsh; Editing by Toni Reinhold)