Florencia Heredia is a partner in Allende & Brea, Buenos Aires, Argentina, where she heads the energy and natural resources practice. She is an expert in natural resources and mining law, with 27 years’ experience advising financing institutions and companies in complex mining and energy transactions in Argentina, and has repeatedly represented lenders in all mining project finance to have taken place in the country. She is constantly nominated as a leading mining lawyer and star individual by Chambers and Partners, The Legal 500 and WWL, which named her Mining Lawyer of the Year for 2013, 2015, 2016 and 2018. She was also highlighted in the Women in Law reviews.
What attracted you to a career in mining law?
As it usually happens in life, my career in mining law started totally by chance, when – being a very junior lawyer – I was asked to have a look at the Mining Code for an American client visiting the firm. This was in 1992, and ever since then I have been working, with total fascination, in the mining sector. It is an area of law that covers an industry with an impact on many other business areas, and therefore relates to other aspects of regulation – including social and political aspects.
Is consolidation in the mining sector a global trend? If so what would you say is driving this?
Yes, consolidation in the mining sector is nowadays a global trend. As a cyclical industry, and following the economic growth of certain countries or regions in the world – and given the increasing relevance of minerals – the impact is necessarily global. Each mineral has its own market and rhythms, and we see things very differently in the cases of gold, copper, silver and, currently, “battery minerals”.
To what extent does political stability play a part in the strategic decisions of mining companies?
Political and economic stability are absolutely of the essence for the decision-making process of mining companies. Mining is a global industry with local impacts, and therefore the development of a mining project will have several impacts for many years in the area of influence. In this sense, political stability and a long-term mining public policy in place are critical for the success of a project. Mining companies consider these issues key when deciding on an investment in a certain country.
How important is it to forge strong working relationships with regulators, and why?
The relevance of interacting with regulators is strongly related to dynamic changes and developments in the extractive industries sector. The world is aiming towards an energy transition in all senses – one that involves renewable energy, and new uses of minerals such as battery minerals. All these trends need to be accompanied by the evolution of regulation to cover new scenarios. In this respect, regulators need to be provided with all the technical facts and information that will allow them to duly and effectively create adequate regulation.
To what extent have trade and tariff disputes between the US and China had a broader international impact?
The current situation and tariff disputes between the USA and China are having an international impact, and it is foreseen that this will continue. The need for minerals in the growth of countries plays a major role in the demand for, and offer of, such minerals, which expand internationally given the size of the economies involved.
What will be the significance in the mining sector of energy companies looking to shift from oil and gas towards greener energy?
It could be expected that energy companies will be shifting more significantly and quickly towards greener energies, and this may involve interaction in the mining sector through battery-minerals projects. The increasing interest in lithium, cobalt, manganese and minerals that relate to the electric vehicles boom is something energy companies are looking into seriously and dynamically.
Diversity upon company boards of directors is an issue of widespread recent discussion. Should mandatory quotas exist in the mining sector?
There has been a very strong – and to some extent successful – trend to include more women on the boards of directors of mining companies. Still, there is much to be done and to achieve in terms of real diversity, and it is debatable whether quotas could help in such respect. In my view, this would not necessarily be the driver to achieve diversity and inclusion. The views of, and pressure from, investors – especially institutional ones – could play a much more effective role in positively evaluating mining companies by the diverse composition of their boards.
Over the coming years, what role will community input play in mining?
Communities have always had a very significant input in the mining sector. In coming years this will be of the essence – moving specifically from a local to a broader input within a country. As mentioned before, mining is a global industry with local impacts and effects, though such effects may also transcend the immediate boundaries of a project. This is due to the fact that communities have become the key stakeholders in any mining project, and therefore in any mining policy of a country.