* Mining companies must get government approval for imports
* Gov’t wants to foment local service providers to industry
* President boosting import controls to bolster trade
surplus
BUENOS AIRES, May 28 (Reuters) – Argentina’s government
tightened controls on imports of equipment and supplies by
mining companies on Monday in a new measure to boost the trade
surplus and foreign currency stocks.
Mining companies operating in the South American country,
which include Xstrata, Barrick Gold Corp and
AngloGold Ashanti, will have to get prior approval for
overseas purchases and submit import plans 120 days in advance.
They will also have to consider swapping imports for locally
produced goods, a government statement said.
“(The controls will help) safeguard jobs, create new
employment opportunities and intensify the import substitution
process,” it said.
Earlier this year, President Cristina Fernandez’s
center-left administration launched a new system to pre-approve,
or reject, nearly every purchase from abroad.
Latin America’s No. 3 economy has also been pushing
importers to match their purchases abroad with exports, leading
to quirky deals such as one whereby carmaker BMW exports rice.
Fernandez says such policies are needed to protect a local
manufacturing industry gutted during a burst of free-market
policies in the 1990s.
They are drawing intense criticism from abroad, however, and
the European Union filed a suit against the import restrictions
with the World Trade Organization on Friday.
Mining companies had been working with the government on a
program of import substitution, but an industry source said
Monday’s resolution was unexpected.
The latest measure could deepen uncertainty among potential
investors.
Brazil’s Vale SA is reviewing a $5.9 billion
potash project in Argentina, partly due to concerns about
political uncertainty related to import controls and the recent
renationalization of energy company YPF.
It is one of the biggest investments planned by Vale, the
world’s second-largest mining company, which declined to comment
on the latest government measure.
Compared with neighboring Chile or Peru, Argentina’s mining
industry is relatively undeveloped. That has drawn interest from
global companies in recent years and overall investment reached
a record $2.6 billion in 2011.
Soon after her re-election last year, Fernandez ordered
energy and mining firms to cash in export revenues in the local
market and ordered tax officials to approve dollar purchases on
a case-by-case basis.
Both measures were designed to counter galloping capital
flight and bolster the central bank’s foreign currency reserves,
which the government has earmarked for debt repayments for a
third straight year.
