Mendoza conveyed a clear message to both foreign and domestic investors monitoring the Argentine mining sector on Tuesday afternoon by instituting legal protections for the San Jorge Copper Project (formally known as PSJ Cobre Mendocino). The provincial Senate sanctioned the project, recording 29 votes in favor, 6 opposed, and 1 abstention. The ruling creates a legal structure that safeguards the initiative from potential future regulatory alterations or changes in leadership. The parliament has sanctioned the establishment of the Western Mining District II, the Mining Royalties Law, and the Environmental Compensation Fund. The communication is unequivocal: the province aims to establish long-term predictability and reposition San Jorge as a new economic driver within its productive framework. The initiative garnered the clear endorsement of President Javier Milei. “It is the closest we have come in the last 20 years to definitively launching mining in Mendoza,” he stated on social media. He stated that the “new Argentina” will experience growth driven by what he referred to as “three pillars”: agriculture, energy, and mining. “With the same level of competitiveness, Mendoza seeks to position itself as a mining producer.” We express our complete support for the province and all individuals advocating for a freer and more prosperous Argentina, a vision we championed over a year ago with the signing of the May Pact,” he concluded.
The action signifies a significant institutional development for Mendoza. This marks the inaugural mining project to receive full approval under Law 7.722, a regulatory framework recognized for its stringent nature and its history of halting large-scale mining endeavors previously. The legislative approval facilitates the progression of the project situated in Estancia Yalguaraz, Uspallata, allowing it to advance to the feasibility study stage prior to the commencement of construction. The mine is set to focus on the production of copper concentrate. The project is being developed by Minera San Jorge S.A., a collaboration between the Swiss firm Zonda Metals GmbH and the Argentine company Alberdi Energy. Total investment is projected at US$559 million, allocated as US$461 million for construction and US$81 million for initial operation. PSJ Cobre Mendocino seeks to establish itself as a key player within the nation’s strategic copper initiatives. The company states that the objective is to achieve an annual production of 40,000 tons of fine copper in the initial phase. In the second year, they possess the capacity to achieve 70,000 tons. The mine is projected to have an initial operational lifespan of 16 years, with the potential for extension up to 27 years.
This production profile is particularly appealing within the global landscape characterized by robust demand for copper, driven by needs in electrical infrastructure, sustainable mobility, and energy transition technologies. Furthermore, San Jorge represents the inaugural mining project in Mendoza to seek approval under the Large Investment Incentive Regime, a national legislation designed to encourage investments exceeding US$200 million by providing enhanced fiscal and exchange rate stability measures. Recently, the province granted approval for the Environmental Impact Assessment pertaining to the project. This decision followed a comprehensive participatory assessment process, which encompassed technical workshops, a 10-day public hearing, and culminated in a detailed 6,000-page report produced by the Mining Environmental Authority. In total, approximately 100 professionals, 16 organizations, the Mendoza Environmental Commission, and the reinstated Provincial Environmental Council, which had not convened for over a decade, engaged in the process. Mendoza Governor Alfredo Cornejo remarked that the endorsement of the Environmental Impact Assessment signifies a “historic step” for Mendoza, facilitating copper production, which is essential for the energy transition and the reduction of reliance on fossil fuels.
The governor urged the citizens of Mendoza to capitalize on this opportunity, assuring them that the province has the potential to emerge as a globally recognized copper producer, mirroring the responsibility it demonstrates in its wine production. He emphasized that progress requires consistency, responsibility, and “not giving in to fear”. Environmentalists opposing the project caution that it may exacerbate water scarcity in a province already grappling with drought conditions. Concerns have arisen regarding the potential for mining operations to necessitate significant groundwater extraction, which may lead to the depletion of aquifers and jeopardize water availability for agricultural purposes and local communities. Another concern is that the project is situated close to river basins that provide drinking water and irrigation, which could be at risk of contamination from mining waste.