De Vido warns declaring Vale in ‘breach of contract’

Planning Minister Julio De Vido came on stage today to bash Brazil-based Vale mining company for suspending its US$ 6-billion Río Colorado project based in the south of Mendoza, and warn that such attitude violates all laws and could end in a breach of contract case.

During a speech celebrated at the Government House, the Minister charged against the multinational funded mining giant by saying “they are violating all national and provincial laws.”

“If Vale does not explode the potash reserves in Mendoza as agreed, they will be then breaching the lease-contract signed with the province of Mendoza”

Before De Vido, Mendoza Governor Francisco Pérez gave the opening speech in which he assured that the suspension of Brazilian mining company Vale’s projectwill not mean the end of the venture.

Likewise, Pérez said the project will continue “even without Vale”, as it is meant to be a “revolutionary and strategic” project for his province as stressed to be a "soldier of President Cristina Fernández de Kirchner."

Likewise the Andean governor said there was a possibility of co-operation between the nation, the province and a third private investor to start a new plan, and bashed the Brasil-based company “I still remember when last year the CEO of Vale came to visit to celebrate the starting of the project. Plus, we even received information saying that the project would move from US$6 to US$10-billion.”

When the news first came out last Monday, the national government initially refrained from commenting. But Pérez, a Kirchnerite, has since commented and today counted with the presence of Planning Minister Julio De Vido, and Cabinet Chief Juan Manuel Abal Medina.

Yesterday, former vice-president Julio Cobos warned that the suspension “should send alarm bells ringing” because it means that the country’s current environment is not attracting “genuine investment.”

Cobos, a Radical leader, explained that the causes of the situation were spiraling inflation, the double exchange rate (blue and official dollar), the lack of a logistical infrastructure and ever-changing business regulations. The suspension should serve as a wake-up call to government authorities, he said.

Furthermore, Cobos concluded “Argentina needs to offer stability and this can only be done with clear rules and respecting the agreements made.”

Meanwhile, the Mendoza Radical party (UCR) demanded an “urgent” meeting with the provincial government to learn how they will deal with this “economic debacle,” which they claimed will leave more than “4,000 workers on the street,” as well as multi-million debts with local suppliers.

Radical leaders stated that the mining company’s cancellation will affect the provincial districts of Malargüe, General Alvear and San Rafael, as well as the whole province.