Argentina mining representatives urge govt action to avoid industrial crisis

Continued government inaction on a lack of mining input imports could lead to stoppages in industrial production.

Representatives of the chamber of mining entrepreneurs (CAEM) and the mining council urged mining minister Fernanda Ávila to approach the problem together with the economy ministry and the central bank.

"The problem has been dragging on since the beginning of the year and despite recent changes, it puts the rate of production at risk, with the possibility of it coming to a complete halt," CAEM said in a statement.

The government implemented a new import system in October to improve control and payments and to facilitate data exchange between the commerce department, customs and the central bank regarding import authorizations.

With the system, the government seeks to avoid over-invoicing and control FX outflow for payments abroad to focus resources on productive imports. But delays persist.

The Argentine chamber of machine, tools and production technologies - Carmahe - demanded that the import of parts and supplies should be prioritized. “The situation we are going through is serious. The import crisis is distressing. Our machines stop. With this scenario we are not going to make it to the end of the year with the plants working,” according to a statement.

In a column, economist Diana Mondino argued that Argentina should sign more trade agreements to help the industry. "The obstacles to imports and exports are not appropriate in a context of great local and international uncertainty", she wrote.

The import crisis is exacerbated by national inflation of around 80%. 

“The surplus of the trade balance in 2021 of US$14.7bn has not been enough to strengthen central bank reserves, which only expanded by US$200mn. And 36.5% of the population is below the poverty line,” Isaias Drajer, the head of industrial association UIA said Thursday during the entity’s 28th conference.

Drajer said Argentina’s annual mining exports reach only around US$3bn, compared to Chile’s and Peru’s US$30bn, even though Argentina’s lithium potential could help supply surging global demand.