Mendoza and the challenge of building a mining ecosystem
A mining ecosystem is built from a network much broader than the projects themselves: companies, suppliers, professionals, universities, laboratories, infrastructure, capital, the State and communities. That fabric is what allows projects to be explored, financed, developed and operated, and what turns a specific mining activity into an industry capable of generating knowledge, services, investment and new opportunities. Without those pieces, mining projects can exist, but not necessarily an industry.
Chile, Australia and Canada are good examples. Mining developed around deposits networks of suppliers, knowledge, technology, financing and specialized services that gained value of their own. The mine generates demand; the ecosystem multiplies its effects.
Mendoza does not start from scratch. During the 1990s and until 2007, it came to concentrate a significant presence of mining companies. Dozens of exploration companies had some degree of presence in the province, even when many were working on projects located in other jurisdictions. In the mid-1990s Mendoza came to be considered “the capital of Argentine mining,” at a time when Alumbrera had not yet begun production and Veladero was still far from doing so.
According to the columnist, much more than restarting a mine is needed. A services platform for mining must be developed so that Mendoza can reach its full potential.
There were reasons for this. Mendoza offered professionals, services, universities, laboratories, an international airport, proximity to Santiago de Chile and a strategic location on the main corridor toward the Pacific. All of that remains. Some conditions have improved; others, unfortunately, have worsened, such as overland connection infrastructure with Chile.
In 2007 that process was cut short. With the passage of Law 7,722, practically all companies left Mendoza and projects came to a halt. But the hardest loss to recover was another one: exploration was interrupted, and with it, the accumulation of geological, professional and business knowledge. In mining, stopping exploration is similar to stopping planting in the forestry industry: fifteen years later there are no trees whose shade can be used. Mendoza pulled down the shutters and San Juan became Argentina's mining epicenter.
Over the past two years, mining has begun to advance in the province. PSJ Cobre Mendocino -which obtained its environmental approval to produce- is in the final engineering process for its construction. Among the hundred exploration projects approved in Malargüe, Kobrea drilled at El Perdido and agreed with BHP to advance other copper projects. First Quantum also announced it would set up in Mendoza. After nearly two decades, major companies are looking at the province again.
Guillermo Mosso, mining and energy consultant and former Mendoza legislator.
But mines alone do not build an ecosystem.
Mendoza has mining human capital, although for years much of it had to be trained or work outside the province. Many Mendoza-based professionals today develop their careers in San Juan, in other regions of the country or abroad. The challenge is to offer them opportunities to return while also training new generations. For years, the specific educational offering was limited to the tertiary level, such as INSUTEC and the technical schools of Malargüe. But today university programs are beginning to be added.
A supplier network is also being developed, and the Cuyo Mining and Energy Suppliers Cluster was formed. Industry chambers have an important role there: grouping, strengthening and representing Mendoza's productive capacity, helping raise standards and creating better conditions to compete. The goal should not be to guarantee contracts or create mandatory intermediation. No chamber can become the owner of local development. The real challenge is to have Mendoza-based companies prepared to compete and win those contracts through capability, quality and efficiency.
UTN will offer the Mining Engineering degree program starting in 2027.
Another initiative can give Mendoza a specialization of its own. Impulsa Mendoza, the Toronto Stock Exchange and the Bolsa de Comercio are working on financial instruments linked to mining and on connections with international capital markets. The opportunity extends beyond Mendoza's own projects: Mendoza can become a hub from which investments for exploration and mining development throughout the Cordillera are structured.
That also requires thinking strategically about the relationship with San Juan, not as competition, but as complementarity. San Juan concentrates most of Argentina's leading world-class copper projects and has accumulated more than fifteen years of experience in large-scale mining, developed suppliers, professionals and business knowledge. Mendoza can contribute urban scale, services, industry, financial capacity, logistics and ties with Chile. Together, the two provinces should form a mining region far more powerful than either could be on its own.
The ecosystem must be completed with technology -where Mendoza already has a knowledge economy ecosystem-, infrastructure, professional services, solid regulatory bodies and an ongoing relationship with communities. A social license is not obtained once, nor does it belong to any single institution. It is built day by day through information, trust-building, oversight, transparency and compliance.
That is why TGA Auditores & Consultores and Rodríguez & Gregorio Compañía de Abogados created RAIZON, a consulting firm focused on mining, energy and natural resources. The idea is to work on what is often missing for an opportunity to become an actual business: connecting projects with capital, matching companies with opportunities, and resolving the legal, regulatory, tax, financial and business issues that arise along the way.
Mendoza's challenge is not only to have mining again. It is to rebuild around it the ecosystem it once began to develop and turn it into a services platform, knowledge, investment and business hub for the entire Cordillera region.
By Guillermo Mosso
Managing Partner at RAIZON – Regulatory & Investment Advisory