Win us with honest trifles

(UPDATED) Pan American Silver (PAAS) is watching Chubut, tomorrow Thursday…


…December 16th because, after some serious political maneuvering by the pro-project Governor Mariano Arcioni, its looks as though the Chubut Parliament will finally have its debate and vote on the so-called “Zonification” law bill. The debate has been slated for tomorrow and, if passed, would allow mining activity in the central Meseta region of Chubut (i.e. “Zonifying” it out of the rest of the Province and its controversial “Law 5001” dating back to the Esquel referendum in 2003 that effectively stops mining from happening).

The pro-mining side is mostly small Meseta towns, larger union groups, plus politicos banging the “more jobs” drum. Meanwhile, the anti-mining side is mostly environmental pressure groups based in the Andes foothills to the West (e.g. Esquel) or the larger towns and cities to on the Atlantic side of the province and with the biggest percentage of population, politically powerful but far from the Meseta. It’s understood in Chubut that the pro-mining position is a net vote loser across the province, so elected officials who vote pro-mining don’t like doing so close to election periods. As we’ve just seen local and regional elections roll through Argentina, the current period offers a window of opportunity for those who want mining but also want to keep their jobs. It makes for a cocktail of politics and both pro and anti mining groups have promised marches and demonstrations in front of Chubut’s parliament building tomorrow to make their case.

And at the centre of it all is ‘Navidad’*, the massive, open-pit silver (well, it’s really zinc/silver with lead) mine project owned by Pan American Silver (PAAS) that would at last be allowed to move forward and become a mine if the law is duly changed. Be clear, Navidad is very big and more than enough to move the share price dial of PAAS if its provincial politicos vote in favour. Governor Arcioni called off a vote earlier this year at the last minute because he knew he didn’t have the votes, since then the make-up of Chubut’s parliament has changed and the activity going on behind the scenes to try and push this law change through has been intense in the last few weeks. If the debate is opened tomorrow (or perhaps next Tuesday 21st, the last window in the province’s parliamentary year) the chances are it will pass, but in Argentine politics anything can happen and often does. Eyes on Chubut tomorrow, PAAS longs.

*Geology legend has it that the discovery was made (or staked) on Christmas Day, hence the name.

UPDATE: Wow! Suddenly and in late afternoon, while nobody was watching and the protest marches for both sides were gearing up for tomorrow, the Wednesday session of Chubut’s parliament decided to run the debate and vote on the “zonification” law project and the project was voted up, by 14 to 11 (which presumes 2 abstentions). This is going to cause a serious ruckus in the province and was a classic “behind the backs” move, but Arcioni has got what he wanted and the national government will be happy, too. As for PAAS, expect the stock to rally at the open tomorrow.

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    […] IKN told you last night, but PAAS didn’t hang around and made sure you all know before the opening bell: […]


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