The soil in this province has been tagged for more than just gold medal-winning reds. It's also destined to quench the uranium thirst of Argentina's nuclear power industry. Luke McMahon investigates.
Mendoza, like the rest of Argentina, is booming. The economy has bounded forward since the crisis of 2001 and the signs of expansion are all around. Government coffers are swelling. New luxury hotels and apartment buildings are going up. International investment and confidence in the wine industry has never been higher. Economic growth nationwide is currently running at 9% a year, and recent figures put Mendoza's annual growth even higher.
But expansion is a power-hungry business. Annual demand was growing at 3% per year before the boom. The bottleneck for Mendoza's economic miracle is widely expected to be the availability of electric power - and many pundits see the choke point approaching fast.
It's easy to imagine that a nation with so many mountains and rivers could generate all the power it needs from hydroelectric schemes. But in fact only about 40% of Argentina's power is hydroelectric, with most of that in Patagonia and the north-east. 50% is generated from gas and oil-fired thermal plants, and 10% comes to us courtesy of the atom.
Argentina's first nuclear power station, the 375 megawatt Attucha I, was opened in 1974 on the shores of the Río Parana just outside Buenos Aires. The second power plant, Embalse, is just outside of Córdoba and feeds the Cuyo region, including Mendoza. A third power plant, Attucha II, was started in 1981 but mothballed in 1994 before completion when nuclear energy went out of fashion. But with issues of climate change and diminishing fossil fuel supplies high on the agenda, governments world-wide are once again looking to nuclear power to keep the lights burning. Attucha II is back on for 2010 and two further nuclear plants are on the drawing board for the next 15 years.
But nuclear plants need uranium to run. Argentina's demands will hit 220 tonnes per annum when Attucha II is online. And the global resurgence in demand has pushed the market price for uranium to a 25-year high of around US$170/kg, from a low of just US$14/kg in 2001. Global demand now outstrips supply, and as the new generationof reactors are commissioned the price is expected to rise even further.
Developing domestic uranium supplies has therefore become not only economic, but a critical part of Argentina's long-term energy strategy.
Argentina has no shortage of uranium reserves. There are old uranium mines in Salta, Córdoba, La Rioja, San Luis, Chubut, and Mendoza provinces which produced ore from the 1950s to the 1990s. Their legacy of 67 million tonnes of radioactive or contaminated mine tailings (waste rock) is now the subject of a US$30 million World Bank-backed clean-up programme. Near Malargüe, for example, operations ceased in 1974 but rehabilitation of more than 3 hectares of tailings only started in 2003. At a processing plant in what is now a middle class suburb of Córdoba city, 1.4 hectares of uranium tailings sit a few metres beyond lucky home owners' back fences.
Historically, Mendoza has been the most important uranium producer for Argentina. Now Mendoza's Sierra Pintada is once again expected to satisfy at least half of Argentina's future uranium requirements.
Sierra Pintada is located in the Cañón del Diamante just west of San Rafael. Mining there ceased in 1995 when the 1-to-1 currency peg meant it was cheaper to buy uranium on the open market.
Things have changed, and restarting production at Sierra Pintada is now a top priority for the federal government. The mine was due to reopen in 2005. But concerted opposition from San Rafael's business community and an alliance of anti-mining lobbyists from San Juan to Malargüe resulted in the intervention of San Rafael's courts to bring a temporary halt the process. Mendoza's provincial government, responsible for environmental regulation of themining industry, then placed a requirement that old workings at the Sierra have to be cleaned up before new mining will be permitted. That process is expected to take 2 years and $17 million pesos.
Opposition to Sierra Pintada has more to do with the nature of mining than the nature of the mineral. Open pit 'hard rock' mining, whether of uranium or other metals such as gold, is anathema to environmentalists. Previous mining operations in Argentina have frequently used 'heap leaching' to extract metals, where powerful acids are sprayed over hectares of crushed rock and the run-off collected and processed. The leachate could potentially contaminate local water tables, both with plant-killing acid residues and poisonous heavy metals like lead and chromium. These metals can enter the food chain via water, vegetables and animals. Many types of mineral-bearing rocks themselves also produce environmentally damaging acid when exposed to air and rain.
While the risks can be managed, and there are now better and safer ways to extract ore, mining in Argentina has historically been characterised by somewhat substandard regulatory oversight. With water scarce and critically important to everyone in the Cuyo desert, from puesteros to orchardists to winemakers, the controversy and anxiety surrounding mining in Mendoza is quite understandable. It would take a mammoth effort to convince anybody drinking from the Río Diamante that sulphuric acid and cyanide circuits on the riverbank upstream are safe.
Nevertheless, mining activity in mineral-rich Mendoza currently makes up 16% of the province's GDP and generous federal tax incentives look set to ensure that the industry expands. And renewed importance of nuclear to Argentina's energy future almost certainly means Sierra Pintada will reopen, probably sooner rather than later. Mendocinos will be hoping that, for the sake of their health and that of their wine and horticultural exports, such activity will at least be subject to the most rigorous environmental controls.
