Economy

Infographic: Argentina’s mining (and conflict) potential

2nd January 2020

By The Essential Staff

Infographic: Argentina’s mining (and conflict) potential

Proponents of mining expansion in Argentina point to the potential in terms of production, exports and fiscal revenue that the country could see if the sector is further developed. Neighboring countries such as Chile, with whom Argentina shares the Andes Mountain Range where most mining activity takes place, has several times the amount of exports and tax income when compared to Argentina, as the graphs below show. But maps of environmental conflicts in the region also show that it is that same Andes region that sees the highest amount of protests and active resistance against mining operations as well, as concerns over the consequences of such activities are also very extended.

Share of mining exports and imports in Latin America and the Caribbean

With 23 percent of mining exports in the region despite its relatively small size, Chile stands out as very active in this regard, although the larger Brazil has 27 percent of exports and Mexico and Peru are not significantly behind at 20 and 15 percent respectively. Argentina, however, merely has 3 percent of the region’s mining exports, according to ECLAC figures.

Selection of countries from Latin America and the Caribbean: Fiscal income from mining sources, 2000, 2007, 2011, 2017 (as % of GDP)

In terms of tax collection, Chile took a massive revenue boost amounting to 8 percent of its gross domestic production (GDP) from mining sources alone in 2007, a truly staggering figure. Of course, commodity prices have fallen from that peak since then, but the country still took 1 percent of its total production straight into the taxman’s coffers due to mining by 2017. Countries rarely collect more than a third or at most half of a given country’s GDP in taxes.

Argentina, in contrast, has never seen that figure rise above 0.2 percent, during the peak years of the commodity price boom. As of now, it stands very close to zero. With new President Alberto Fernández eager to improve both exports and tax collection, it is clear why his advisers would be pointing to mining as a potential source to expand both.

But, as his first month in charge seems to be proving, expanding mining activity rarely comes without conflict and objections.

Location of mining-related conflicts across the globe according to the Environmental Justice Atlas

As this Environmental Justice Atlas map shows, the Andes mountain range in Western Latin America is arguably the most dense area in the world in terms of mining-related conflict. Mendoza, San Juan and Chubut provinces, all very prominent in mining-related news during December, are all part of this region. If the national and provincial governments in Argentina plan to go ahead with their plans to expand the sector, they should expect more strong resistance from the region, where many remain unconvinced of the benefits of this extractive activity.

The Essential Staff

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