The best is yet to come: How Argentina plans to fuel a mining boom

Boosted by the Rigi investment regime, Argentina expects US$1.6bn in mining investment next year, more than US$20bn between 2026 and 2029, and sector exports increasing from US$4bn to US$13bn by 2030.

Rigi offers fiscal and exchange stability and benefits related to VAT and income tax, as well as import and export exemptions, for projects with a minimum investment of US$200mn.

With a portfolio of 180 projects, of which 23 are in production, eight under construction and the rest in different phases from prospecting to feasibility, the Argentine mining sector is expected to be a key driver of the economy.

BNamericas talks with Mario Belardinelli, lead mining partner at consultancy KPMG Argentina, about this transformation and the outlook for 2025.

BNamericas: What are the prospects for Argentine mining in 2025 under Rigi?

Belardinelli: This regime was expected in the economy and by the industry, since clear rules, transparency, stability and predictability for investors were required.

Rigi includes some benefits of the mining investment law and incorporates several others, making it very attractive for producers and mining companies, who continue to analyze how to join Rigi, as well as provinces, which is generating a very important movement in mining. There are good prospects for 2025.

BNamericas: Yet, Rigi does not include environmental provisions or incentives to develop project infrastructure...

Belardinelli: From the perspective of environmental preservation, a large part of the mining companies in Argentina are very committed to this issue. We see changes in planning and management priorities that are closely related to the environment and international standards to achieve decarbonization goals.

Management plans are more proactive with respect to environmental issues, since today it's not possible to carry out mining without being tied to responsibility in this regard.

Infrastructure is an obstacle and a goal that needs to be worked on, but there are commitments to improve roads and access to mining sites to encourage activity, since Argentine mining is expected to contribute to the energy transition.

BNamericas: And what's the general economic outlook for next year?

Belardinelli: We have a president who committed to a plan that, in some way, with successes and failures, has been fulfilled and inflation and the exchange rate are being controlled.

This is a year of transition, coming from a major economic disaster, and although the government entered congress with a minority, actions are being taken to reduce public spending and the role of the State. We should see stabilization beginning in 2025, while we will continue to try to put things in order.

BNamericas: Will copper projects such as Taca Taca, Josemaría, Filo del Sol or Los Azules advance under the current government and what role does Rigi play in this process?

Belardinelli: At Josemaría, there is concrete action through BHP's move [in a JV with Lundin Mining] to take advantage of the reserves, and the governors of different provinces are upbeat about Rigi, with which they will promote investment opportunities. Rigi will boost investments that have been made and investors will follow these winds of change with a greater willingness to invest.

This is an important moment for the country and as we continue to send more signals to the world that we are improving as a niche for investments and are able to show signs of recovery and stability, new investments will come. 

There are many movements in copper and lithium, as we saw with the merger between Livent and Allkem to create Arcadium, which will now be controlled by Rio Tinto. These movements will generate an injection of capital that will be very favorable for our economy.

BNamericas: Does Argentina have the local suppliers and workforce needed to sustain the growth of the mining industry?

Belardinelli: Today, mining producers have a large part of their suppliers in the regions, but this [mining growth] requires a redefinition of skills to meet new technical requirements. Other types of suppliers are needed, such as those linked to clean production and the green economy, who will be prioritized when contracting.

Companies are working on redefining mining services, as part of new management plans, and investments are being made in areas such as training, technology, sustainability and artificial intelligence. This is part of a process of transformation of local producers and suppliers.

BNamericas: Rigi is targeting investments of US$200mn or more, but what about lower capex initiatives, such as continuity or operational improvements?

Belardinelli: Today, Rigi is geared toward large investments, but the government and the mining department are familiar with the mining map and know that there are projects in operation that are in expansion stages and require less capital.

Although it's not directly addressed by Rigi, it's not something that the government is unaware of and it's not something that will not be addressed. 

In my view, these needs will also be addressed in the sector because mining is a combination of large investments, those that are operating, and junior companies, and they all need government support.

BNamericas: Mendoza province has a history of opposition to mining, but lawmakers are now seeking approval to develop the Malargüe western mining district. How are the prospects for the social license?

Belardinelli: This year, Mendoza's governor showed investors at the PDAC convention his enthusiasm for mining development, but to achieve this, communication by the industry toward society is needed.

Although there is a clear message about the contribution of mining to the energy transition and the promotion of clean energy, it’s key to continue communicating through actions and raising awareness that this is a transformed industry in order to keep demystifying mining.

BNamericas: What will happen to gold and silver mining, which is currently stagnating?

Belardinelli: Gold and silver continue to be the main sources of foreign currency in the local mining industry. Although there are no major investment announcements, unlike for copper and lithium, companies continue to invest, at least to maintain current installed capacities.

BNamericas: Could legislative risks put pressure on mining companies next year?

Belardinelli: Regulations and laws aim to support the mining transformation and ensure that international standards are met. I'm not thinking of regulations that hinder, but rather, in the face of a world that is changing with increasingly higher global demand, regulations that set clear rules to allow for the arrival of capital and place Argentina on a similar level to other jurisdictions.

BNamericas: What role will Argentina play in the geopolitical context marked by the change of government in the US and rising demand by nations seeking to secure their critical minerals supply chains?

Belardinelli: Today, Argentina's mining exports are concentrated on China, the US or Switzerland, but the government has a pro-market philosophy and within that framework I believe it will seek to diversify destinations.

The energy industry in general, not just mining, has been one of the businesses that has best adapted to the volatility of geopolitical conflicts, despite the fact that the main energy-producing regions are anchored in places where there are conflicts.

Since [Russia's invasion of Ukraine], for example, a dynamism has been generated in the sector that is aimed precisely at diversification.

As a country, we cannot be tied to the will of China or the US, and in order not to be harmed, governments and companies are looking for alternative channels to place their production to avoid being tied to certain countries.