Tight credit and falling metals prices due to the international financial crisis have caused a sharp slowdown in mining exploration along Argentina’s Andes.

Exploration in San Juan province this year fell 14% from 2007 to 175 million pesos ($51 million), according to a study from the provincial mining ministry cited by industry magazine Mining Press.
San Juan is heavily dependent on revenues from mining, and the province’s strong support of the industry has attracted a number of major projects. About 20% of all investment in

Argentine mining exploration was spent in San Juan this year, according to Mining Press.
Barrick Gold Corp. (ABX) operates the Veladero gold mine in the province, and development projects include Yamana Gold Inc.’s (AUY) Gualcamayo mine and Xstrata PLC’s (XTA.LN) $1.8 billion-to-$2 billion El Pachon copper mine project. Twenty-six companies are exploring in the province, provincial Mining Minister Felipe Saavedra said recently.

Barrick also hopes to develop its $2.4 billion Pascua Lama gold-mine project in San Juan, but the company’s plans are on hold as Argentine and Chilean officials continue to negotiate tax sharing for cross-border mine projects like Pascua Lama.

In addition, the international financial crisis has made borrowing costs too high for some projects to move forward.

In October, Australia’s Intrepid Mines Ltd. (IAU.AU)suspended plans to develop its $70 million gold and silver mine project in San Juan.

“Given the dramatic impact of financial market turmoil on the availability of funds – with debt availability uncertain and equity markets effectively closed – the company has taken the decision to postpone construction of the Casposo project at this stage, notwithstanding some of the best gold and silver intersections in current extension drilling being received,” the company said in a press release.