(Bloomberg) -- Argentine President Alberto Fernandez had to dodge protesters to get onto a minibus that was then pelted with stones as environmentalists battle a move to give mining the green light in Chubut.
In the Patagonian province to check on efforts to extinguish forest fires, Fernandez was caught off guard as protesters seized the opportunity to take their objection to precious-metal mining to the very top of government.
The latest twist in a yearslong conflict shines a light on a growing challenge for mining companies around the world as environmental, social and governance expectations rise among investors, regulators and the general public. In Peru, community opposition has held back major copper projects. In Mexico, McEwen Mining Inc. has halted work at its El Gallo gold project because of community blockades.
Argentina has huge untapped deposits of lithium, copper, gold and silver. One of the barriers to development is anti-mining sentiment stoked by environmental blemishes such as three cyanide incidents in two years at a Barrick Gold Corp. mine in San Juan province.
With support from a federal government desperate to kick-start the economy, provinces have been working to approve open-pit mining and the use of certain chemicals. In Chubut, Canada’s Pan American Silver Corp. is waiting on lawmakers to allow it to proceed with a $1 billion open pit.
While mining companies are recalibrating their approach to communities and the environment, the pace is too slow for some observers.
In Argentina, it’s the provinces that own mineral resources. Protests have led oil-producing Chubut to delay a parliamentary vote twice this year that would allow mining in two areas. In Mendoza, better known for its Malbec wines, provincial lawmakers actually passed a law in December 2019 to unlock copper mining, but the governor was forced to suspend it following social unrest.
Fernandez flew into the eye of the storm on the weekend. The heart of Argentina’s anti-mining lobby is Esquel, a tourist town at the feet of the Andes where residents and those of nearby communities, including the one visited by Fernandez, voted against mining in a 2003 referendum. (Chubut’s current efforts to push through mining legislation don’t apply to its Andean region.)
The gold project that originally vexed Esquel is now owned by Yamana Gold Inc., which took steps last year to sell a stake to local businessman Eduardo Elsztain and a partner.
©2021 Bloomberg L.P.