Mining Introduction | Leading Mines

Argentina is the newcomer in gold production, jumping from nowhere into 14th place in the world, and fourth in Latin America in 1999, before slipping slightly to 17th position in 2000 when output as reported by GFMS was 26 tonnes (0.84 million oz). Production recovered significantly in 2001 to reach nearly 31 tonnes (0.99 million oz), a 19% increase.

The reason is that gold deposits do not respect frontiers. Over the last 20 years, epithermal gold deposits high in the Andes mountains of Chile have been successfully developed, notably at El Indio. The logic was to follow the trail over the border, now that the political situation in Argentina is stable and the mining environment more welcoming. So a scramble is on to get the best properties.

The winners were Australia's Mount Isa Mines (MIM), North Limited (taken over by Rio Tinto in 2000) and Canada's Rio Algom, who opened the Bajo de la Alumbrera copper-gold open-pit project late in 1997, got output up to 23 tonnes (0.69 million oz) by 1999 before it dropped back just over 16 tonnes (0.52 million oz) in 2000. The sharp decline in that year was, in part, due to operational difficulties. However, in 2001, an improvement in metal recovery rates, increased throughput and better grades saw output recover to just over 20 tonnes (0.67 million oz).

The Cerro Vanguardia gold-silver open-pit began in 1998 and turned in 10 tonnes (0.32 million oz) in 1999, before declining to 8.9 tonnes (0.28 million oz) in 2000. Production at the mine reported in 2001 was broadly flat on the previous year at around 9 tonnes (0.29 million oz).

On the development side, the merger between Barrick and Homestake (completed in December 2001) has revived some interest in the mothballed gold-silver Pascua-Lama project on the Argentina/Chile border. According to a recent statement, work has begun on looking at the possibility of combining the Pascua-Lama (Barrick) and adjacent Veladero (Homestake-Barrick jv) deposits. It is thought that the projects could benefit in a variety of ways, both in terms of capital and operating costs savings. Immediate synergies include the sharing of infrastructure, administration costs and background environmental work as well as the incorporation of Barrick's Filo Norte reserves into the Veladero mine plan. Barrick Gold has also got IMA exploration drilling at Potrerillos close by, which is also just over the border from Barrick's own El Indio in Chile, and has been buying up other locations in the area. Smaller mining companies are swapping properties or trying to get a foothold, but development will depend on the gold price.

Even so the Argentina/Chile frontier is a busy place, and output could rise considerably by 2005.