McEwen Mining Inc (MUX)

[gharma]

Argentina certainly does not get it. As per Vale, and the article, the project is not economic.

The Labor Ministry started the process to protect Vale’s employees and contract workers involved in the failed project to develop the Rio Colorado mine,

The blame likely goes partly to Vale, but partly to the Mendoza provincial government, some to the Argentine government's mining, local sourcing, and repatriation policies, and much to the actual vs official inflation and exchange rates.
All the same, bottom line is Vale does not see the project as worth the continued expenditures despite how much is being abandoned. That the government thinks it can force the foreign company to continue to employ the workers and contractors, and apparently force it to develop this mining operation, is simply stunning. "hey, so we make it uneconomic (collectively, per above factors) but we need the industrialization and the exports it will create (and allow us to capture as repatriated, non-exportable GDP) so OK lets talk and see which part of this can be eased enough that you will not put up a legal fit over your freedom to walk away"
What a strange state of affairs. It will be interesting to see what concessions Vale gets out of the federal and provincial governments, but it sounds as if so far the government has simply ordered that Vale and its employees and contractors find a solution. Odd as my guess is that they are the smaller part of what makes Vale see the project as no longer economic.