Environmental activism, deteriorating business environment making Argentina risky for miners

Friday, December 14, 2012

Argentina is a high-risk destination for mining companies and is becoming increasingly more so due to the deteriorating business environment, Maplecroft senior Latin America analyst Irenea Renuncio told BNamericas.

Of greatest concern, however, is a growing trend of environmental activism from a mobilized population that is ready to protest against mining projects in the country, Renuncio said.

"In overall terms, the fact that the business environment is deteriorating is also bad news for the mining industry, but of most concern is environmental-related activism against mining activities in Argentina," she said.

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Companies operating in the country also face cash flow difficulties as a result of the tight foreign currency and import restrictions the government has implemented. Furthermore, inflationary pressures, both on the labor and supply fronts, have made it "increasingly costly for companies to do business in Argentina," she said.

To read the full interview with Irenea Renuncio, click here