A mining project focused on copper, gold, and silver in the Argentine province of San Juan has submitted a request to participate in the Incentive Regime for Large Investments, which offers tax breaks, currency-exchange advantages, and various incentives. The Vicuña Argentina project signifies a projected investment ranging from US$15 billion to US$17 billion over the forthcoming decade. Vicuña Argentina represents a collaborative effort between the Australian mining firm BHP and the Canadian company Lundin Mining. Following its application for inclusion in the RIGI on Thursday, it committed to investing US$2 billion over the next two years, contingent upon government approval of its bid to join the regime. Economy Minister Luis Caputo stated that the project represents “potentially the largest foreign direct investment in mining in our country’s history.”
Vicuña comprises the Josemaría and Filo del Sol deposits, situated near the Chilean border. In May, BHP and Lundin Mining revealed that the combined resources of the deposits position the Vicuña district among the top 10 largest known copper deposits globally. In January, both companies finalized the acquisition of Filo Corp., a company listed on the Toronto Stock Exchange that held full ownership of the Filo del Sol copper project. Prior to that transaction, Lundin Mining held full ownership of the Josemaría project, from which BHP acquired a 50% stake. The companies subsequently established the joint venture entity incorporated in Canada, known as Vicuña Corp.
Mike Henry stated in January: “BHP is one of the world’s leading producers of copper, a metal essential to global economic growth, the energy transition and to the rapidly growing demand for data centres to support the harnessing of artificial intelligence.” This represents a pivotal juncture for the mining sector in Argentina. This week, the provincial Senate of Mendoza granted approval for the San Jorge Copper Project. Mining initiatives within the province have been significantly hindered by a legislative measure enacted in 2007, which restricts the utilization of specific hazardous substances, including cyanide, mercury, and sulphuric acid, in mining operations. On Tuesday, the local Senate approved the environmental impact assessment of the project, thereby granting it the necessary approval to proceed. The sector perceives it as a pivotal example that may pave the way for forthcoming initiatives.
The proposal to permit mining projects in the province has faced significant opposition from environmental organizations and the vital wine sector, which argue that such activities would contaminate freshwater supplies and jeopardize vineyards. Approved in mid-2024, the RIGI serves as a framework aimed at attracting substantial investment in Argentina. Despite the nation’s abundance of natural resources, investor sentiment remains cautious due to ongoing economic instability and the recurrent implementation of currency controls, which can result in capital being immobilized within the country. Critics of the RIGI argue that the tax breaks it provides are overly generous, impeding Argentina’s capacity to accumulate reserves and foster local industry.