Minerals, Mining and Steel Industries in Argentina

Argentina has a variety of mineral resources. It has significant reserves of natural gas and oil and has stocks of valuable minerals such as gold, copper, and iron. Argentina’s natural gas sector is now privately owned after the state monopoly Gas del Estado was split into a number of private companies in 1992. The largest pipeline company in Argentina (and all of South America) is TGS, which is 70 percent-owned by the U.S. Company Enron. It provides two-thirds of Argentina’s natural gas consumption. Many international companies have entered the Argentine oil market.

Chevron, BP Amoco, Shell, Unocal, and the French-based company Total all have a presence in the country and seek to expand operations as exploration continues offshore on the country’s continental shelf. The Argentine company Repsol-YPF accounts for about 50 percent of the country’s total refining capacity, followed by Shell at 17 percent, and Esso at 16 percent. The remaining production is divided among 4 small companies. YPF has US$6 billion in annual revenues and plans to invest US$15 billion over the next decade in new oil exploration. By 1999, total oil production was 900,000 barrels per day, with exports of 372,000 barrels per day.

In 2000, total mining exports were US$1 billion. Estimates are that this figure will grow to US$2.3 billion by 2004, as total investments in mining are expected to reach US$5 billion by 2005. Major minerals include gold, lead, silver, uranium, iron, and zinc. In 1998, gold production amounted to 19,459 kilograms. Copper production was 170,273 metric tons, the lead was 15,004 metric tons, and zinc was 35,560 metric tons. Several major international companies are investing in new operations in Argentina. Major mining companies include Japan’s NKK and the Argentine company Minera Alumbrera.

In 1994, the nation’s main steel company, Aceros Zapla, was privatized. Since then, steel production has increased at an average annual rate of 4 percent. Crude steel production averages about 4.19 million metric tons. The majority of steel products, almost 90 percent, are used domestically. Argentina also produces a variety of building products that are mainly used in the domestic market. Forest and timber plantations cover some 1 million hectares and produce mainly softwoods that are used to make plywood and other composite building materials. Declines in construction have hurt the building materials industry which has been operating at only 57 percent of capacity since 1997. Although the construction industry has been in decline, industrial production of building materials has increased—mainly as a result of exports.