Argentina’s government tightened controls on imports of equipment and supplies by mining companies this week in a new measure to boost the trade surplus and foreign currency stocks, according to reports by Reuters. Mining companies operating in the country, which includes Xstrata, Barrick Gold and AngloGold Ashanti, will now have to get prior approval for overseas purchases and submit import plans 120 days in advance – a major headache in terms of bringing in mining equipment not manufactured or available domestically.

They will also have to consider swapping imports for locally produced goods, a government statement said: “The controls will help safeguard jobs, create new employment opportunities and intensify the import substitution process.” Earlier this year, President Cristina Fernandez’s centre-left administration launched a new system to pre-approve, or reject, nearly every purchase from abroad. Argentina has also been pushing importers to match their purchases abroad with exports.

Fernandez says such policies are needed to protect a local manufacturing industry gutted during a burst of free-market policies in the 1990s. They are drawing intense criticism from abroad, however, and the European Union has filed a suit against the import restrictions with the World Trade Organisation. Mining companies had been working with the government on a program of import substitution and the new resolution was unexpected. Vale is reviewing its $5.9 billion potash project in Argentina, partly due to concerns about political uncertainty related to import controls and the recent renationalisation of energy company YPF.

This government move has come at a bad time, as compared with neighbouring Chile or Peru, Argentina’s mining industry is relatively undeveloped. That has drawn interest from global companies in recent years and overall investment reached a record $2.6 billion in 2011.