Northwest pins growth hopes on mining, interconnection

New mining and power transmission projects would help generators in northwest Argentina find new markets, sector executives said at a mining and infrastructure conference in Tucuman city last week. Northwest Argentina, which is made up of the provinces of Jujuy, Salta, Tucuman and Catamarca, is Argentina's poorest region, but is also its richest in terms of mineral resources. Energy companies are eyeing with interest official and private-sector initiatives to spur development in the mining industry. "We see mining projects [in the region] as a big opportunity for electrical energy," said Juan Carlos Blanco, commercial manager for Argentine energy trader Cemsa. "The sector could add up to 400MW of extra demand if new projects come on line." These projects mostly consist of potential copper-gold projects in Salta and Catamarca, boosting production at the Salar de Hombre Muerto lithium operations in Catamarca, and extensive industrial mineral deposits across the region. Other plans include an industrial park project in Tucuman that aims to add value to the raw materials. Executives from generator Guemes, which supplies all of Salta and Jujuy's power demand, and oil company Pluspetrol, have expressed their interest in using the transmission lines and other projects that would provide opportunities for new markets. Guemes is struggling to remain competitive in the low-cost Argentine market, and would like to see the completion of a secondary network of 132kV transmission lines in the region that would bring many isolated towns and settlements into the grid, Guemes' general manager Carlos Peralta said. Meanwhile, Pluspetrol is on the lookout for more large-scale private clients, who already account for 28% of its market. New mining or minerals processing projects nearby would be just the ticket, Pluspetrol engineer Cristian Juarez said. Guemes has 261MW installed capacity in Salta, and Pluspetrol has 1,000MW installed capacity in three plants. Salta is in Argentina's NOA (northwest Argentina) grid, and connects to the national grid through a 132kV line to El Bracho, further south. It is not connected to the northeast grid (NEA). There are however projects to connect the NOA eastwards and southwards: running a 500kV line 1,000km south to Mendoza would cost some US$310mn, while interconnecting with the NEA - which would complete a system stretching from Chile's northern grid (SING) to Brazil - would cost US$240mn, said Silvio Resnich, CEO of Argentina's dominant transmission company Transener. Although details such as who would pay for the lines are not settled, a more immediate need is for Argentina's economic and judicial climate to improve, the executives warned, calling for President Nestor Kirchner to out forward an energy sector plan. Cemsa's Blanco called for "a clear plan with defined objectives, [and] a flexible regulation system that is adapted to [the country's] economic realities and permits coverage of all financial costs." Neither would it be feasible for the lines to go ahead at the current low prices of US$10/MWh in Argentina, which remain subject to a price freeze enforced by the federal government soon after the economic meltdown early in 2002, he added.