After importing 1.4 billion banknotes from China, the Government wants to privatize the Mint

The organization under the orbit of the Ministry of Economy was intervened in November of last year. The Mendoza intervener Pedro Cavagnaro reduced the workforce from 1,300 to around 600 employees through voluntary retirements and dismissal telegrams with 50% compensation, and paralyzed the printing of banknotes, despite having two new German machines ready to be used.

The next step will be defined next week, when the last extension of the intervention defined on August 28 for 120 days expires. “It is likely that when the intervention ends, a board of directors will be appointed and progress will continue towards its privatization.but there is still no defined schedule,” confirmed government sources.

The person in charge of advancing this process is the State Transformation Agency, the body responsible for privatizations, whose head is Diego Chaher, a man of presidential advisor Santiago Caputo. The Government could get this much dollars after handing over the IMPSA metallurgical company and four Patagonian hydroelectric plants for a total of US$1.2 billion.

In the midst of his trips to Mendoza, Cavagnaro met in recent weeks with several interested parties about the future of the organization, such as ARCA authorities, Customs and ATE representatives. To the latter, he told them that he was suspending layoffs for Christmas. It also received potential suppliers, such as the English firm De la Rue, and several of the creditors..

The Government owes more than US$300 million for inks, banknotes and other imported supplies during the administration of Alberto Fernández and Milei. As Clarín learned, The order issued by the Minister of Economy, Luis Caputo, is that after almost three years he will pay the capital owed in up to 12 installmentsdepending on the size of the supplier, without covering interest or late payment.

The club of creditors is made up of the National Mint and Stamp Factory of Spain -popularized by the La casa de papel series-, its Brazilian counterpart, the Swiss-German global banknote printer manufacturer KBA, the German ink producer GSI, the American Crane, the French Oberthur, the Chinese state printing company China Banknote Printing and Minting Corporationand the Argentine Permaquim.

According to sources familiar with the matter, the stretching of payments generated concern in European embassies. And it was striking that the Swiss ink manufacturer SICPA was the only one which collected about US$80 million in Treasury bonds last year. Cavagnaro received them twice in the last 30 days. The idea is to transfer the machine that prints stamps on cigarette packages to ARCA.

There are other less visible tensions. According to data from the Central Bank, In the last two years, the Government imported at least 1,420 million banknotes with a total cost of US$ 72 million. China sold $10,000 and $20,000 bills worth between US$48 and US$58 per thousand units, crushing other competitors. Crane’s subsidiary in Malta was only able to print 190 million banknotes, the remaining 15%. “The tenders are based on price,” said sources from the economic team.

The Chinese advance generates confusion in the industry, where they assure that It is difficult to find that a country has transferred the manufacturing of a good considered strategic, such as banknotes, to China. Not even Venezuela and Cuba. Only Nepal, Hong Kong and Macau do so. And countries without mints, such as Uruguay, Paraguay, Bolivia and the Dominican Republic, do not let it compete.

In the local financial system they observe that Beijing became the monopolistic supplier with “dumping” prices (below cost). Another of the fronts that would have generated unrest in the United States. “The Chinese make strategic and geopolitical decisions, they are not interested in making money, they can sell at a loss to enter a new market and even more so if it involves banknotes,” said a source.

According to sources close to the Mint, the $10,000 Maltese bills and the $20,000 Chinese bills presented a complication: their deterioration. In the market they claim that they are of lower quality than the European ones. But in three banks they stated that they did not detect any deterioration. The official plan is for China’s stock to last until June 2026, although ATE warns that the new exchange rate band scheme that will debut in January will imply greater demand for pesos than expected.

Given the impossibility of covering the demand for pesos, as a result of growing inflation, Alberto Fernández began importing banknotes from Brazil, Germany, France, Malta and China. He also bought two new machines from Germany: The first arrived in 2022 and the second left Customs two days before Javier Milei took office, without paying all the bills. The printer is still stored in a box at the main printing plant in Retiro.

Argentina is one of the few privileged countries in the region with a Mint for 150 years. The others are Brazil, Mexico and Chile. With the assumption of the new administration, Federico Sturzenegger eliminated the prerogative that required the Central Bank to buy 100% of the banknote production from the organization and began calling for public tenders, excluding the Mint from them.

After the approval of the Base Law, the Government converted it from a State Company to a Unipersonal Joint Stock Company (SAU), It stopped printing the $1,000 and $2,000 bills, and restructured it because it was oversized.that its two plants represented large operating costs, that there was an excess of imported machinery, and that it was heavily in debt.

The reorganization included the transfer of real estate to the AABE for execution and the transfer of functions to other areas: fiscal control and traceability instruments, such as cigarette stamps, to ARCA, the manufacture of passports to RENAPER, and the operation of two virtual wallets to ARSAT. Thus, the activity of the Mint was reduced to destroying the 50, 100, 200 and 500 peso bills printed in 2017.