Ring flexibility
Economy, together with the Ministry of Mining, in charge of Fernanda Ávila, are currently working on the final details of the decree to encourage the mining sector. One of the benefits that companies will have is free access to dollars from their exports, which will range between 10 and 25%, depending on the case, depending on the requirements that are met. It will be similar to the one published on August 12 for hydrocarbons, called “Foreign Exchange Access Regime for incremental oil production.”
The difference with that of hydrocarbons is in the conditions that the mining companies will have to comply with. On the one hand, andhe main objective will be the “added value”: it will be implemented through presentations of company programs for the development of local suppliers, in the provinces or regions where the company operates. There will be a state control based on indicators and metrics to see the evolution of the plans. From Mining, Ávila, a native of Catamarca, and Flavia Royón, currently in the Secretary of Energy, and former head of the Secretary of Mining in Salta, have experiences of these cases in their provinces.
Another requirement will be reinvestment to extend the useful life of the projects, which, due to how the mining tax scheme has been designed, there are companies that do not find incentives to carry it out. As an example, official sources mention the Cerro Vanguardia project, in Santa Cruz, which began in 1998 and had a useful life until 2012. Currently, it continues to function and in the last decade the company’s exports exceeded US$ 5,000 million than initially planned.
From the Government they hope that with free access to the dollar, companies will advance in the payment of inputs for production, given that there are complaints from the sector due to the measures of the Central Bank, and they anticipate that without the next changes the obstacles could imply lower production and exports by 2022. Another use will be the payment of dividends for the parent companies and finally the repayment of loans, given that mining requires strong investments that companies finance with credits from international banks.
In the Government they have expectations that the new regime will strengthen the sector, because it is a “wink” to mining, after several requests from the Chamber of Mining Entrepreneurs (Caem). The economic team considers that the importance of mining lies in the fact that it is the fourth export complex, the second in surplus in the economy, and because of the geopolitical importance of minerals such as lithium.
On the other hand, from the Ministry of Mining they are working on two tax benefits that could be added: VAT refund for exploration projects, in a job that is carried out in conjunction with the AFIP, and tax refund for alteration of fiscal stability by the mining investment law.
Investments in lithium
On his first tour of the United States, Massa will look for investments in the mining sector, visiting two giants such as Livent and Río Tinto. In a year in which no project started production, the Government knows that two strong investments in lithium are coming. These are companies that will be registered under the “Investment Promotion Regime for Exports” (Decree 234), which gives benefits to companies that invest over US$100 million.
At the moment, the only mining company that had joined had been Sales de Jujuy to extend its useful life. Now the Chinese company Liex will join with an investment of US$500 million for the Tres Quebradas lithium project in Catamarca. The other that will enter will be the French Eramet, with an investment of almost US$450 million, also for lithium, in the Centenario-Ratones project in Salta.
Source: Ambito
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