According to foreign media reports on May 23, industry analysts say that mining giants including Lundin Mining, Glencore, and First Quantum Minerals are flocking to Argentina as the government of Javier Milei aims to attract foreign investment. This brings these mining giants closer than ever to developing large copper mines in the Andes Mountains. This influx of investment is part of the global effort to prevent further tightening of copper supply, a key material in electrification efforts to combat climate change.
If Javier Milei can convince mining companies in Toronto, Melbourne, and London that their projects are not affected by the country’s political turmoil and business regulations, and if these mining companies can persuade the Argentine public that the economic benefits outweigh the environmental risks, Argentina will share in the wealth generated from these mining activities.
Currently, Argentina produces almost no copper, despite sharing geological conditions with neighboring Chile, the world’s largest copper exporter.
Out of more than 20 copper projects under consideration in Argentina, six have been approved. By 2035, Argentina could become a major copper supplier, with annual copper production exceeding 1 million tons.
According to local mining group Caem, by then, Argentina’s annual copper export value could exceed $8 billion.
Marcelo Awad, CEO of Antofagasta from 2004 to 2012, said: “With the change of government, I think Argentina is now set to become a major competitor to Chile. Pro-business policies clearly make it a strong contender to attract capital flows to copper projects.”
Javier Milei, a libertarian, is attempting to reduce government influence and free businesses from various controls. The country has experienced recession six times in the past ten years.
Milei’s predecessor, Mauricio Macri, attempted a similar approach during his 2015-2019 term but made little progress. To avoid a repeat, Milei needs to stimulate economic activity. Mining is one of the few industries capable of boosting Argentina’s business activities, presenting a clear opportunity. This is why Milei has offered a comprehensive range of tax, monetary, and customs benefits and incentives to large investors, under a plan called “RIGI.”
Michael Meding, General Manager of McEwen Copper’s Los Azules copper mine in Canada, stated that the construction cost of the mine would be $2.5 billion. If the mine obtains the necessary permits within Milei’s four-year term, construction could begin midway through his term.
Copper, a crucial conductive metal, has seen significant price increases in recent months, partly due to concerns that increased demand from clean energy, military equipment, and data centers will create a supply gap.
Despite large untapped copper deposits underground, developing these resources is becoming increasingly expensive and difficult amid rising social and environmental concerns. In Argentina, these issues are even more pronounced, but record-high copper prices and Milei’s shift to a more business-friendly environment have suddenly made copper asset development more feasible for miners.
Argentina has already succeeded with lithium, a key mineral for electric vehicle batteries. However, copper projects are typically larger in scale, more expensive to build, and more environmentally destructive.
For mining explorers, Argentina is a particularly unstable country, focusing more on agriculture and oil industries rather than metals, unlike neighboring Chile and Peru.
In addition to obtaining government environmental permits, miners operating in remote areas of the country must also secure “social licenses” from communities and other groups. In a country that has not fully embraced the metal industry, this is a daunting task, but miners say it is crucial to avoid protests and mining disruptions.
San Juan, a relatively underdeveloped province in Argentina with an economy based on agriculture and solar energy, has been welcoming to miners, unlike other local governments that are unwilling to compromise on ecological issues.
In addition to wetlands, glaciers are another concern. A federal list from the government identifies 16,000 protected areas in the Argentine Andes, many located in San Juan.
Glencore is attempting to remove a glacier-rich rocky glacier from the list to proceed with its El Pachon copper project.
Earthquakes pose another major threat: a major earthquake could damage mines and release chemicals into river systems.
Bill Shaver, COO of McEwen Copper’s parent company, stated that in his 50-year career, he has heard arguments that mining activities would have catastrophic environmental impacts.
Industry analysts suggest that miners could bring in external experts satisfied with the project to meet with locals and address their concerns.
“Miners must work with communities, or else NGOs might step in, leading to prolonged disputes,” they said.
San Juan province has the authority to issue environmental permits for mine construction. The province hopes that copper will bring investment, jobs, and taxes. However, local government officials are also aware that they must be cautious regarding social and environmental issues.
San Juan Governor Marcelo Orrego said in an interview: “We are developing mining, which is also national policy, but we also know we cannot make mistakes on environmental issues.”
For miners, there are risks even at the national level: Javier Milei’s proposal to offer RIGI tax incentives to miners is part of his broader deregulation efforts. However, a similar “sweetheart deal” offered by the Panamanian government to miners led to protests and the closure of a giant copper mine.
[Source – 上海有色网] 米莱改革后 铜矿狂热令阿根廷吸引了矿业巨头的目光 https://news.smm.cn/news/102771249
