Governor Omar Gutierrez gave the adjudication certificate of the Andacollo Mining Project to the owner of the company Trident Southern Explorations SPA, Leon Aleksander. The formal ceremony was held this morning in the Agreement Hall of the Government House.
The provincial president was joined by the Vice Governor Rolando Figueroa; the owner of the awarded company; the Minister of Energy, Utilities and Natural Resources, Alejandro Nicola; the mayor of Andacollo, Ariel Aravena; the mayor of Huinganco, Luis Sepúlveda; and the president of the SEP Mining Corporation of Neuquen (Cormine), Martin Irigoyen.
Gutierrez stressed the importance of action by the national government to eliminate taxes on mining exports. “This has allowed the investment to develop,” he said, noting that “the legal, economic and political predictability provided by the provincial government for this investment of 164 million dollars in 25 years will allow recovering the 4.6 million dollars invested by the province’s treasury to avoid social friction”.
In addition, the provincial president acknowledged the actions of the former governor Jorge Sapag regarding conflicts with the company Minera Andacollo Gold SA, which abandoned the project, leaving its workers unemployed.
He said the funds provided by the company as an initial fee will be “used in the investment of basic infrastructure for the northern area of the Neuquen province.”
Gutiérrez highlighted “the legal, economic and political predictability provided by the government for this investment of 164 million dollars in 25 years”.
He stressed how important it is for “each of these 144 employees to keep their jobs so they can continue being the breadwinners of their family. There is a present and active state, which empathized and made a commitment not only to support employment, economic sources and families, but to foster an environment that would allow the private sector to take off again.”
Gutierrez explained that, within the requirements of the bid specification, one of the conditions for the awarded company is to maintain sources of labor. He said “this was developed for two years and discussed with the national government, the mayors, the community, and Father Diego –parish priest of the town-, whom I’d like to acknowledge for all his support”.
The owner of the contractor thanked the provincial authorities and presented the project. He explained the features of the new high-tech plant to be installed in the area and stated that the Australian company has “over 40 years of experience in all mining business processes.”
He also broke down the investment amount in the north of the province, which will amount to 122 million dollars over 25 years in exploration, meanwhile 42 million will be invested in the same time frame for the exploitation process. This will generate a total investment of 164 million dollars, which “obviously includes a new high-tech plant to improve the future production of the project.”
Initially, this will create 144 jobs. “In the long term, if the exploration of the project has a positive outcome, which we expect to recruit up to 500 employees” said Leon Aleksander.
For his part, Minister Nicola thanked “the workers that have been involved. They have been with us throughout the whole process. Thanks for being with us again today.”
Likewise, he said “I will paraphrase a common statement by the governor: Neuquen is a land of opportunity. I think this mining project of the north of Neuquen, in the area of ​​Andacollo and Huinganco, clearly reflects this.”
He continued by saying that “The crisis that started last year has been going on for 20 months already, so the provincial government decided to carry out a managerial plan based on some premises: primarily to preserve the mining project, the environment and the labor supply of workers who sustain nearly 150 families in that area.”
Nicola highlighted that “the fact of having four interested companies with four offers in the international competitive bidding shows the benefits of the project and predicts success.”
The mayor of Andacollo thanked the provincial government “for the support in this process”, and the presence of the miners. “This is a historical fact, doubtlessly linked to our history. Andacollo has developed thanks to mining,” he said.
Gutierrez explained that, within the requirements of the bid specification, one of the conditions for the awarded company is to maintain sources of labor.
He also expressed that “this new process invigorates us with huge expectations”. He stressed: “This has emerged in a special context. As mayors, we have taken a leading role in the provincial cabinet since the implementation of the political decision of Governor Omar Gutierrez, which fills us with pride. Beyond the pride, it allows us to talk to the minister and directly address our community problems.”
He also acknowledged the former governor Jorge Sapag “who supported us through a complex situation, from a social perspective”. He said that “the state could move forward in a supporting process, investing over 40 million pesos to pay salaries and maintain the mining operation”.
Finally, the mayor of Huinganco recalled that “we have a history of over 100 years of mining activity,” adding that “we are willing to cooperate with not only this mining project, but with the governmental project of defending local autonomy, the progress of each neighbor and especially by supporting such endeavors.”
The selected company offered to pay a royalty of 3.3% of turnover less taxes, a fee of US $4.600,000, of which 460 thousand dollars will be credited to the contract signing and the rest will be paid in 10 installments per year, and a total investment of 164 million dollars.
Of the four firms competing in the tender, Trident had the highest investment amount for the 25-year plan, and a mining royalty doubling the offer of other companies. In addition, it promised to install a new ore processing plant, when other bids proposed only to refurbish the current one.
The 25-year term contract includes the incorporation of all the staff employed by Cormine when the company Minera Andacollo Gold SA. abandoned the project. Trident also proposes a methodological sanitation program for the tailings dam.
The project will be presented next week in the north.