Argentine mining investment at risk - report

BUENOS AIRES, March 10 (Reuters) - Mining investment in Argentina could be affected by uncertainty over recent changes to the tax regime, according to a report published on Monday by a local consulting firm.

The country's fledgling mining industry has taken off in recent years, with many junior miners launching exploration projects due to high global prices and an attractive tax regime introduced in the 1990s.

Buenos Aires-based consulting firm IES said that while mining investment totaled $200 million between 2001 and 2003, it jumped to about $1.7 billion last year alone, accumulating more that $4 billion since 2004.

However, the report said the government's recent decision to scrap some miners' exemptions from export duties would make the country less attractive to mining companies.

"The export duty increase ... and the passing of laws that hinder the industry's development, are seen making (the country) less attractive to new investment," it said.

In December, the government started to charge mining companies an export duty of between 5 and 10 percent.

That led some mining companies to start legal proceedings against the government. They say the increase undermines a mining law guaranteeing miners tax stability for 30 years from the moment they submit feasibility studies.

At an international mining conference in Toronto last week, Mining Secretary Jorge Mayoral played down concerns that the export duty change could hurt investment.

However, a top official at Swiss-based Xstrata (XTA.L: Quote, Profile, Research) said the measure "sends a very negative message to international investors," throwing into question the company's $2 billion El Pachon project.