Argentina Orders Glacier Inventory For Protection Effort

The Argentine government has taken the first step toward implementing a glacier protection law, ordering a nationwide inventory of glacial ice that will determine which areas will be put off limits to mining.

President Cristina Fernandez issued a decree Tuesday ordering an extensive study of the country's glaciers, peri-glacial areas and changes to the glaciers in recent decades.

Preliminary data will be available in a year, although it will likely take five years to complete the full study, Environment Secretary Juan Jose Mussi said at a press conference.

Argentina's Congress passed legislation in September limiting economic activity in the areas surrounding glaciers, and environmental groups are likely to try and use the new law to block a number of mining projects.

Environmentalists have criticized the government for dragging its feet in implementing the law. The bill gave the government 90 days to put it into effect, but that deadline passed in January.

The administration has been less than enthusiastic about the glacier law, with heavy criticism coming from a number of governors in mining provinces who say it will stunt development. In 2008, Fernandez vetoed similar legislation, but signed the bill Congress sent to her last year.

The law already faces several legal challenges in the courts, with a number of provinces questioning its constitutionality.

In November, a federal judge in San Juan province suspended key provisions of the law at the behest of labor unions and mining industry associations until the Supreme Court can rule on its validity. Barrick Gold Corp. (ABX, ABX.T) convinced the same judge to suspend the glacier law with regards to its Veladero and Pascua Lama mines. The Pascua Lama gold and silver mine, currently under construction, carries an estimated price tag of $3.3 billion to $3.6 billion. Production is scheduled to start during the first half of 2013.

Argentina's constitution limits the federal government to setting the basic standards for environmental protection, but leaves the implementation of those standards to the provinces. However, the courts have yet to clearly define the fine line between state and federal rights and the issue will likely go to the Supreme Court.

In addition, the conflict hinges on the definition of the so-called peri-glacial areas protected by the law, which could be limited to a tight perimeter around the glaciers or extended to half the country under its broadest interpretation. That is likely to be the focal point for legal challenges by environmentalists.

The Center for Human Rights and Environment, or Cedha, has begun to conduct its own survey of the country's glaciers and charges that Xstrata PLC's (XTA.LN) Filo Colorado and Yamana Gold Inc.'s (AUY, YRI.T) Agua Rica projects will run afoul of the glacier Law.

Barrick said its activities don't take place on glaciers and that it has taken a range of measures to protect water resources, glaciers and other sensitive environmental areas around its project. However, the company is getting ready to fend off lawsuits from environmentalists.

"It is possible that others may attempt to bring legal challenges seeking to restrict our activities based on the new federal law. We will vigorously oppose any such challenges," Barrick said in its fourth quarter earnings release.

-By Shane Romig, Dow Jones Newswires; 54-11-4103-6738; shane.romig@dowjones.com

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