Currently viewing Global edition

Argentina to implement new copper export duty

Argentina will implement a new copper export duty tonight giving producers the option to select a fixed rate of 4.5% or a variable rate between 0% and 8%, minister of economy Martin Guzman told participants at the Argentina Land of Giants seminar organized by the Lundin Group at the 2022 Prospectors and Developers Association in Toronto, Canada.
Argentina to implement new copper export duty Argentina to implement new copper export duty Argentina to implement new copper export duty Argentina to implement new copper export duty Argentina to implement new copper export duty

Paul Harris in Toronto, Canada

Guzman said the variable rate will by 0% when the copper price is less than US$3.50 per pound and 8% when it is more than $5.25/lb.

Between these two values, it will be 0.8% of the difference between the prevailing copper price less the $3.50/lb floor price. So at $4.50/lb copper it will be 0.8% and a $5/lb it will be 1.2%

"The president has signed a decree on adapting the export duties for copper which will be published tonight. This reduces investor uncertainty and reduces the volatility of the rate of returns," said Guzman.

Former Josemaria Resources president and CEO Adam Lundin, said the company is still aiming to negotiate other fiscal items to increase the certainty of investment for the Josemaria copper project in San Juan which was recently purchased by Lundin Mining, and to find ways to manage the difference between the official US dollar- Argentina peso exchange rate and the so called blue peso rate in Argentina.

"We are talking with the government about this, and we may look to raise money locally and do other things to mitigate this difference," he told Mining Journal.

The government of Argentina is aware that improving and clarifying the financial conditions will be key to unlocking a potential windfall of mining investment. Last year, it adopted new capital regulations for foreign exchange which provides miners with the right to use up to 60% of the foreign currency obtained from exports.

"Argentina is a key actor. … The government is giving clear signals of support to develop [copper] projects. The government has a delegation of six governors, the minister of economy and the secretary of taxation policy attending the PDAC to show the strong commitment the country has for the development of mining and all the added value chain," said Secrety of Mining Maria Fernanda Avila.

Argentine has an estimated 75.42 million tonnes of copper resources and reserves, including advanced stage copper projects including Josemaria, El Pachon, Filo del Sol, Taca Taca and MARA representing some $16 billion in capital investment and which together could mean 1Mt of annual red metal production.

Most read Commodities

Most read Commodities