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Development and Application of Stakeholder and Community Relations Policies in the Development of a New Mining Project in Argentina

Kevin Fox, International Mining and Oil & Gas Law, Development and Investment (2009)

The Potasio Rio Colorado Project is potentially, one of the largest ever foreign investments in Argentina and with an estimated initial Capital cost of greater than US$ 2.5B will allow Vale to develop a potash production facility of up to 4.3 million tonnes per annum, making Argentina the fifth largest producer of this key fertilizer mineral. The project has an expected life of at least 50 years and will require the construction of considerable infrastructure, in the form of transportation requirements and power generation. Project implementation will require establishment of the mining operation, using solution mining, a new mining technique in Argentina, and Processing plant at the mine site, as well as new transportation capacity in the Provinces of Neuquen, Rio Negro and La Pampa and a new port facility in the city of Bahia Blanca in Buenos Aires Province. Thus the project “footprint” extends across five provinces and one thousand kilometers and therefore touches a great variety of stakeholders across a huge geographic area.

The project is located in the Malargue Department of Mendoza Province, in a sparsely populated area with a semi-desert climate. Very low rainfall means there is little capacity for agricultural development and the main economic activity in the area is oil and gas production. The Potash resource is at a depth of approximately 1000m and occurs in