Having been appointed National Mining Secretary for Argentina for the second time, Daniel Meilán talks to Natalie Daniels about the country’s current state of play and how he is trying to change public perception of the mining industry.
Tell me about your background and career to date.
I have always been interested by the whole world of minerals. I studied at La Plata National University, Argentina, specialising in geology, followed by a masters in mining engineering science at the University of Guanajuato, Mexico. I graduated with two other colleagues and went to work with both of them at a company that specialised in non-metallic minerals, specifically a mineral called barytine (BaSO4 with traces of Sr, Ca and Pb), mostly used in the oil industry, until the company went into liquidation. I became the sub-Secretary of Mining for Argentina in 1994 and was then appointed National Mining Secretary until 1999. After this, I worked as an international mining consultant until moving back to the role of National Mining Secretary for a second time in 2016.
What are the key issues you would like to address in Argentina's mining industry?
There are two main challenges. The first is related to international communities and companies coming into Argentina to provide additional investment in the country. We need to persuade investors to come and mine, as currently most of the domestic capital is in non-metallic minerals and application rocks, rather than in metallic minerals. The second challenge is to make sure that society is convinced of the importance of mining. Some think that mining just creates pollution and believe that it is bad for a society to have a mining territory. We must now work to revert these beliefs so people in local communities trust the industry. It means that the Federal Government needs to be serious and answer society’s concerns and questions, and this is what we are trying to do now.
How are you trying to change public perception?
First, we are trying to strengthen the public sector. As Argentina is a federal country, we need a strong dialogue between the nation and the 23 provinces. It will require additional strengthening, discussion and consensus among authorities to the community to reassure people they are certain of what they are doing and they foresee what is coming in future. We also need to show that there is a state protecting them against any wrongdoing and that any environmental problems that do arise can be controlled. Our citizens have little trust in the state – they think that the Government will respond more to companies and communities – this is a vision we need to change. The only way to change it is to work hard and acknowledge their concerns seriously. Over time we hope to gradually remove that perception.
It has been reported that Argentina could be about to flood the market with lithium. How will you be looking to expand operations?
Our purpose is not to control the world lithium market but work with it. Following conversations with Bolivia and Chile, our three countries have set out a ‘lithium triangle’ that connects us. Collectively, we are the largest three players in the world, alongside China. Currently, Bolivia, Chile and Argentina hold 80% of lithium reserves in the world. Chile was the first country to go to the lithium market with one of the biggest lithium producers in the world, SQM. On Argentina's side, there is FMC Lithium's Argentina Facility and in Bolivia, no one was producing lithium. Bolivia put limits on foreign investment because they wanted companies to leave the value added inside the country while Argentina has had one operator producing lithium since 1995. It was predicted in 1958 that lithium would dominate the market, but it only happened in the 20th Century. This spike in demand that everyone thought was coming happened a lot later than predicted.
At some point, some countries even discussed a cartel whereby they would get together and fix prices. However, we rejected this instantly as Argentina is not looking to be part of that. We didn't want to fight this tri-monopoly, we wanted players and in a way we have achieved that as we already have got investment from French, Australian, Canadian, North Korean and Chinese technology producers.
Companies based in Argentina including SQM, FMC and Tianqi are coming to the market with lithium batteries and non-conventional energies. The best way to break up the market is by allowing everyone access to facilities to produce their own lithium. For 2020, we are looking at a world market of 350,000 tonnes of lithium and with more investors coming into the country, we hope that Argentina will be producing half of the world's supply. No one knows the limit as of yet. There is a technology competition with hydrogen, but at this stage, we don't know whether hydrogen will catch up or even replace lithium altogether. Lithium could have a limited horizon as well, but we are unsure what that horizon is. We have no control over how long this could go for. But, we know the train is coming and we’d better board it now. We have 30 exploration companies for lithium and more than 45 projects in just over two years.
How many jobs do you expect to create and how do you plan on sourcing this labour?
It depends on the size of the project. On average, each project will employ between 150–200 people. The employers working on the project will generate five jobs directly related to the project, in turn creating up to 1,000 jobs. It is a nice problem to have but it will be a problem, because in some regions we have extremely low population density, so training will be a challenge. That said, we know a lot of our players coming to market and many are coming for specific projects.
There were some environmental concerns regarding open pit mining. What is being done to improve these environmental credentials?
The mining and environmental authorities need to work together to benefit the communities in terms of building trust. Many of the terms used by people who are against mining show their real objective is not necessarily to make things better for the environment but just to avoid mining altogether. Some people have a general good will and want to protect the environment, whereas others have more of a political reason to object to mining, which is based on non-consumption.
You held the same role as Mining Secretary in the 1990s, how does today’s environment compare with then?
It is a challenge and a rebuilding process. I am trying to best apply my knowledge and experience of things I did back then and what I could have done better to try and improve on them this time. I hope that we can change the perceptions of politicians in mining to show that the extractive industry is an activity they can protect and support openly and publically.
What are your hopes for the future of Argentina's mining industry?
First, that it is an activity that accompanies the rest of production in Argentina. The country will not be a mining country but rather a country with mining. It is a country that has different sources of wealth based on agriculture, cattle, steel, construction materials, tourism and mining. Argentina does not depend on one industry and this will allow it to be a much better distributed country, where the wealth is decentralised, where population moves around where different parts of Argentina will carry more weight than others. We hope that mining will produce 3% of the GDP. For us, this would be a good figure, especially as it would greatly affect the western part of Argentina.
Daniel Meilán was appointed the National Mining Undersecretary for Argentina in 2016, having previously worked as a consultant on mining policy and geology. He has been an advisor on mining policies in countries including China, Vietnam, Congo, Kazakhstan, Kyrgyzstan, and the Governments of Bolivia, Chile, Colombia, Ecuador, Mexico, Guatemala and Germany.