Universidad Nacional de Moreno Departamento de Humanidades y Ciencias Sociales

Idioma Optativo – Inglés Nivel 1 Departamento de Ciencias Económicas y Jurídicas

Assignment 7 - 2C 2023

1. Skim the text and complete the following chart

SOURCE

AUTHOR/S

KEY WORDS

READING HYPOTHESIS

ECONOMY | 12-01-2022 22:31

Argentina wants to triple mining exports, despite social conflicts

Government introducing new incentives to grow the sector over next decade, but social and environmental organisations
warn of impact.

JAVIER LEWKOWICZ
Javier Lewkowicz is an Argentine journalist who writes on China and the environment.
He writes on Página/12 and Diálogo Chino, among others.

TRUCKS OPERATE AT BARRICK GOLD’S VELADERO GOLD MINE IN SAN JUAN PROVINCE, ARGENTINA. | MARCOS
BRINDICCI/ALAMY VIA DIÁLOGO CHINO
Argentina’s government is seeking to grow the country’s mining output to improve foreign exchange earn-
ings, with the introduction of a set of new incentives for the sector.

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 Universidad Nacional de Moreno Departamento de Humanidades y Ciencias Sociales
Idioma Optativo – Inglés Nivel 1 Departamento de Ciencias Económicas y Jurídicas

As due dates on its heavy external debt arrive on the horizon – and in the midst of negotiations with the
International Monetary Fund to refinance the record US$57-billion loan it received in 2018 – the Alberto
Fernández administration is looking to a diverse range of minerals as a means to boost its economy.
However, the new incentive scheme faces questions over socio-environmental aspects of the sector’s expan-
sion, due to the impact of its activities on local communities. The most recent episode was the approval of
mining in areas of Chubut Province, which sparked massive protests and led the government to ultimately
reverse its decision.
On the other hand, the renewed impetus comes in a context of energy transition, and increased global de-
mand for minerals that are essential to many technologies. According to the International Energy Agency,
demand for minerals is set to double or even quadruple by 2040, depending on the degree of adoption of
new technologies.

The sector in numbers

According to data provided by Argentina’s Mining Secretariat, nine metal-mining projects are currently
operating in the country. The main products are gold, silver, lead and zinc, along with the much-talked-
about lithium, for which there are two projects in operation and another under construction. Operations are
concentrated in the provinces of San Juan, Santa Cruz, Catamarca, Salta and Jujuy.
In recent years, these minerals (1) have been extracted by a number of companies with strong foreign
capital investment and local subsidiaries. These include: the Canadian firm Barrick Gold and China’s Shan-
dong Gold, which make up Minera Andina del Sol; South Africa’s AngloGold Ashanti that runs the Cerro
Vanguardia gold and silver mine; Newmont – the world’s largest gold mining company – and its Argentine
subsidiary, Oroplata; multinational giants Glencore and Yamana that operated the Minera Alumbrera cop-
per-gold mine, alongside Newmont; and Minera Santa Cruz, jointly operated by British firm Hochschild
and Canada’s McEwen Mining.
The local mining sector operates on the basis of concessions granted by provinces, which own the resources.
Mendoza, Chubut, Córdoba and San Luis all currently have legislation limiting or prohibiting mining activi-
ty, as a result of social pressure against its development.
Large-scale mining has been boosted since the mid-1990s by low taxation, fiscal stability measures and the
possibility of settling its legal disputes in international tribunals. In fact, the sector pays practically no value
added tax (VAT) and has a special regime for income tax.
In 2020, affected by the Covid-19 pandemic, the value of mining exports fell to US$2.6 billion, down from
US$3.2 billion in 2019. But the mining sector’s contribution in terms of value added is much lower than its
weight in exports: its contribution to Argentina’s GDP is just 0.6 percent, according to official data provided
to Diálogo Chino. In terms of employment, direct registered jobs in the sector amounted to 9,681 in 2019,
representing 0.15 percent of formal employment in the country. (…)

New commitment

The government of Alberto Fernández has set out to increase annual mining exports to more than US$10
billion over the next 10 years, thanks to investments of US$25 billion from the 34 mining investment pro-
jects in the country that are at a more advanced stage.
To provide a further incentive, export taxes for the sector were reduced from 12 percent to eight percent in
October 2020; for 2022, the government is considering an even more flexible scheme. In addition, last
April, the transfer abroad of profits and dividends was made more flexible for exporters that invest more
than US$100 million.
The new incentives are part of the Strategic Plan for Mining Development (PEDMA), whose official presen-
tation has been delayed for several months, though many of its (2) details have already been announced.
This programme proposes a new approach to mining supposedly linked to sustainability and dialogue with
various societal actors, as well as including a series of additional benefits and incentives for mining compa-
nies.

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 Universidad Nacional de Moreno Departamento de Humanidades y Ciencias Sociales
Idioma Optativo – Inglés Nivel 1 Departamento de Ciencias Económicas y Jurídicas

“The tax burden [in Argentina] is still higher than in countries that it competes with in terms of mining
production,” says Luciano Berenstein, executive director of the Argentine Chamber of Mining Entrepre-
neurs (CAEM). The sector is calling on the government to further reduce withholding taxes taken from em-
ployees’ wages, speed up VAT refunds and increase access to the foreign exchange market.
Daniel Schteingart, director of the Centre of Production Studies (CEP XXI), which reports to the Ministry of
Productive Development, argues that mining in Argentina is, together with hydrocarbons, the sector that
pays the highest wages, and has the highest rate of formal employment in the economy.
“Mining leaves much more in the country than what is usually stated,” Schteingart adds. He says that be-
tween 12 percent and 14 percent of its sales stay in the form of taxes – mostly social security and withhold-
ings – 30 percent of purchases from suppliers, and between 11 percent and 12 percent in the wage bill. In
addition, part of the sector’s profits are reinvested.
The government welcomed the recent announcement by the Canadian company Lundin that it (3) will in-
vest US$4.2 billion to produce copper, gold and silver in San Juan province. According to company esti-
mates, it will generate 2,500 jobs and US$1.7 billion in annual exports. It is due to start operations in 2026
and has a useful life of up to 19 years.
Elsewhere, Canada’s Barrick Gold and Chinese company Shandong Gold announced investments to extend
the life of Veladero – Argentina’s largest gold mine – to 2030, while the Lindero mine, operated by the Ca-
nadian company Fortuna Silver Mines, started operating this year. It became the first open-pit mine in Sal-
ta province.
Meanwhile, there are investments to expand lithium extraction at existing projects run by Orocobre–
Toyota, an Australian and Japanese partnership, and by US company Livent, along with the upcoming
launch of Cauchari–Olaroz, operated by Minera Exar, a joint venture from Canada’s Lithium Americas and
China’s Ganfeng Lithium. There has also been investment from French firm Eramet to build the
Centenario–Ratones project from 2022.

Social conflicts

Despite the government’s claims on the scheme’s commitment to sustainability and consultation, environ-
mental organisations do not foresee many changes from how the sector has developed in the past.
“We see a horizon of increasing conflict with communities, because large-scale mining has traditionally
provoked all kinds of rejection over the last two decades,” explains Pía Marchegiani, director of environ-
mental policy at the Fundación Ambiente y Recursos Naturales (FARN). “Civil society is organised, and
governments have repeatedly failed to listen and manage conflicts.”
For Marchegiani, the main problems relate to the use of water, since the projects are located at the headwa-
ters of the basins that are used by the communities downstream. “There is competition for the resource,”
she says. “This is taking place in a context of lack of information, lack of community participation, institu-
tional weaknesses and criminalisation of protest. As a result, when it comes to decisions, there are usually
no options other than total rejection.”
A turning point came in 2015, when the biggest accident in national mining history occurred at the Veladero
mine in San Juan, managed by Barrick Gold. Five rivers in the province were contaminated with heavy
metals from a broken valve.
“It reopened debates on the uncertainty inherent to this type of project, not only in terms of their environ-
mental impact, but also in terms of transparency of information and government capacity to control [these
activities],” says Lucrecia Wagner, a researcher at government science and technology agency CONICET.
Marcelo Giraud, a member of AMPAP, an organisation fighting for clean water in Mendoza Province, argues
that although mining salaries are higher than average, such jobs are not usually for natives of the provinces,
but for local and international migrants. “It is not quite right to say that metals’ mining represents a sub-
stantial contribution to the demand for local labour,” he added.
Just as it demands workers, large-scale mining can also jeopardise the continuity or viability of other
sources of employment, Giraud argues. “Therefore, where it is clear that society does not grant a ‘social li-
cence’ to mining projects, job creation is by no means a compelling argument to counterbalance the impacts
and risks involved,” he adds.

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 Universidad Nacional de Moreno Departamento de Humanidades y Ciencias Sociales
Idioma Optativo – Inglés Nivel 1 Departamento de Ciencias Económicas y Jurídicas

For Nicolás Gutman, head of the environmental section of the Scalabrini Ortiz Centre for Economic and
Social Studies (CESO), “it is a mistake to think that facilitating business and handing over mining wealth
will generate development.”
“There is no capacity for control on the part of the provinces, and companies do not develop local suppliers
in the industrial area because they can bring in free machinery that they have stopped using in other parts
of the world,” he added.
Despite the concerns and contestations of civil society groups, the Fernández administration is likely to
press on with the new scheme and its incentives, with the formal presentation of its strategic plan, PEDMA
(Plan Estratégico para el Desarrollo Minero Argentino), set to arrive early this year, after stalling in 2021. Re-
ports say the government will seek to achieve consensus with civil society before the presentation.
https://www.batimes.com.ar/news/economy/argentina-wants-to-triple-its-mining-exports-despite-social-conflicts.phtml This article is repro-
duced with kind permission from the publishers. Visit dialogochino.net for more.

2. Match each sentence with the appropriate tense.

PRESENT PERFECT Argentina’s government is seeking to grow the country’s mining output to
improve foreign exchange earnings,...
SIMPLE PRESENT The most recent episode was the approval of mining in areas of Chubut Prov-
ince
SIMPLE FUTURE There is no capacity for control on the part of the provinces
PRESENT CONTINUOUS …the government will seek to achieve consensus with civil society before the
presentation.
SIMPLE PAST …large-scale mining has traditionally provoked all kinds of rejection over the
last two decades.

3. Reference.
(1) These minerals
(2) its
(3) it

4. Read the following sentences taken from the text and write True or False. Justify.

a) “Therefore, where it is clear that society does not grant a ‘social licence’ to mining projects, job creation is by
no means a compelling argument to counterbalance the impacts and risks involved,” he adds.

 This is a case of Direct speech.

b) …mining salaries are higher than average…

 This sentence includes a superlative adjective.

c) The most recent episode was the approval of mining in areas of Chubut Province, which sparked
massive protests and led the government to ultimately reverse its decision.

 This is a defining relative clause.

d) …the biggest accident in national mining history…

 Biggest is a superlative adjective.

 This is a noun phrase and the head noun is accident
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 Universidad Nacional de Moreno Departamento de Humanidades y Ciencias Sociales
Idioma Optativo – Inglés Nivel 1 Departamento de Ciencias Económicas y Jurídicas

5. Identify the tense of this sentence and explain if it is in active or passive voice. Justify.

Large-scale mining has been boosted since the mid-1990s by low taxation.

6. Translate the following noun phrases. Remember that the words with ING can be acting as nouns, verbs or
adjectives. Identify each case.

a) … Argentina’s largest gold mine…

b) …the country’s mining output…
c) …foreign exchange earnings, …

7. Linking words are KEY elements in the text.

Explain the following linking words in context. Which ideas do they connect and how?

As due dates on its heavy external debt arrive on the horizon – and in the midst of negotiations with the Internation-
al Monetary Fund to refinance the record US$57-billion loan it received in 2018 – the Alberto Fernández administra-
tion is looking to a diverse range of minerals as a means to boost its economy.
However, the new incentive scheme faces questions over socio-environmental aspects of the sector’s expansion,
due to the impact of its activities on local communities.

8. Choose two sentences from the text: one sentence regarding an advantage and one sentence describing a
disadvantage of the mining projects operating in Argentina.

9. What is the relationship between these images and the text above?