President Javier Milei is set to alter regulations safeguarding Andean glaciers to facilitate access to tens of billions of dollars in mining investments, as per sources. The libertarian leader has provided miners seeking to extract copper and lithium resources with the opportunity to secure their investments through the ‘RIGI’ package, which includes tax, customs, and exchange advantages. However, numerous projects, such as Glencore Plc’s US$9.5 billion El Pachón, continue to face challenges in their initiation, in part due to a federal law that safeguards glacial formations. Milei is set to propose modifications that would effectively weaken those protections to Congress for consideration, according to an individual who requested anonymity due to the confidential nature of the discussions. Another option for Milei, who has a renewed mandate to advance his deregulation agenda following a decisive victory in the midterms last month, would be to implement changes through decree. However, the congressional route would provide firms with an additional layer of protection. Should the president successfully navigate the cumbersome regulatory landscape, it is highly probable that companies will be more inclined to invest, positioning Argentina as a significant player in the copper market. The global demand for this metal continues to rise, as it plays a crucial role in applications ranging from electrification to plumbing.
Following an increase in his representation in Congress during the midterm elections, Milei is poised to be in a significantly enhanced position to secure a voting majority in both chambers when the new lawmakers assume their roles on December 10. Business leaders are anticipating that he will promptly introduce tax and labor reforms for which they have been advocating for an extended period. Argentine leaders have previously attempted to amend the 2010 Glacier Law. Mauricio Macri viewed it as a component of his strategy to attract investments into Argentina throughout his presidency from 2015 to 2019. Milei incorporated modifications in the initial drafts of his hallmark reform legislation; however, these articles were excluded from the final ratified version. “Without RIGI, these projects wouldn’t have been possible,” stated Juan Donicelli during a conference on Thursday. “The macroeconomic conditions are present. Currently, there are outstanding matters that both national and provincial authorities are cognizant of.” The obstacles facing mining initiatives, such as El Pachón and Vicuña, a collaboration between BHP Group of Australia and Lundin Mining Corp of Canada, revolve around the presence of rock glaciers and ice shelves that play a significant role in river basins and freshwater resources.
A federal government inventory, released in 2018 to aid in the preservation of glacial landscapes, identified 16,000 distinct ice formations within the Argentine Andes, a significant number of which are located in the mining-intensive San Juan Province. The existing regulations provide a somewhat ambiguous legal definition of rock glaciers, which frequently encompass ice. The mining sector typically regards the 2018 inventory as overly expansive, contending that certain formations ought not to be classified as glacial in nature. “The industry, through the Argentine Chamber of Mines, has indicated that the Glaciers Protection Act necessitates specific clarifications, as a periglacial area could influence the advancement of many significant copper projects within the country,” a Glencore spokesperson communicated. El Pachón has sought to have a rock glacier reclassified to facilitate progress. In 2023, San Juan Province consented to remove it from a provincial list; however, Glencore continues its efforts to have it eliminated from the federal inventory. In the last decade, when El Pachón was under the ownership of a company later acquired by Glencore, the project attracted international scrutiny from a local NGO due to its purported effects on the glacial network. The case concluded without any binding resolution. El Pachón faces challenges similar to those posed by the presence of rock glaciers. Barrick Gold Corp abandoned a gold and silver project spanning the Chile border a few years prior, partly due to a dispute regarding its effects on ice masses.
The terrain surrounding McEwen Copper Inc’s Los Azules project in San Juan is characterized by over 150 rock glaciers, including one adjacent to a marsh that will restrict its intended open pit operations. A preliminary assessment indicates that they could also complicate expansion plans. “A longer-term opportunity may exist to reclassify areas where no evidence of glacial activity is found,” the report stated. Under Milei, environmental issues in Argentina have been re-contextualized as integral to his administration’s strategy for revitalizing a crisis-prone economy, primarily by leveraging the nation’s abundant natural resources. In September, the Vicuña venture indicated that it is depending on San Juan Province to maneuver through the federal glacier legislation to secure robust permits for its multi-billion-dollar copper project. “We believe we have very limited exposure and threats,” stated Jose Luis Morea, Vicuña’s senior country manager for Argentina and Chile, when questioned regarding his project’s adherence to current glacier regulations. “We find ourselves in a more advantageous position compared to other projects.”