Milei’s push to ‘Make Argentina Great Again’ puts copper potential in the spotlight

Argentina's President Javier Milei is scrambling to unlock the South American country's copper potential, seeking to capitalize connected surging planetary demand amid a propulsion toward electrification and renewable energy.

Milei, a self-described anarcho capitalist who won a daze election successful 2023, has unveiled a bid of tough reformist measures successful an effort to stabilize the traditionally volatile system and "Make Argentina Great Again."

As portion of this push, Milei's medication hopes the mining assemblage tin play a cardinal role, peculiarly successful respect to copper and lithium.

One of the libertarian president's flagship policies has been to present the Large Investment Incentive Regime, oregon RIGI, a strategy designed to supply generous tax, commercialized and overseas speech benefits to large-scale investors implicit a 30-year period.

To date, 20 projects worthy conscionable implicit $30 cardinal person sought introduction into Argentina's RIGI, according to planetary hazard quality steadfast Verisk Maplecroft, three-quarters of which are successful mining. Copper unsocial is estimated to correspond $16 billion, much than each non-mining sectors combined.

Major players including BHP, Glencore and Rio Tinto are among those making bold bets connected Argentina's copper and lithium potential, with apical executives from Glencore and Rio Tinto precocious traveling to conscionable with Milei connected a travel to Buenos Aires.

Ro Dhawan, CEO of the International Council connected Mining and Metals (ICMM), a commercialized assemblage representing astir one-third of the planetary industry, described Argentina arsenic "arguably the astir breathtaking caller copper communicative today."

There are different countries and jurisdictions which whitethorn beryllium much geologically rich, Dhawan said, but not 1 that sits astatine the intersection of a unchangeable home governmental environment, and the proviso of basal infrastructure and facilities and capable different investments complementary to the mining industry.

Among the astir notable copper projects successful Argentina is BHP and Lundin's Vicuna associated venture.

Situated on the Chile-Argentina border, the Vicuna District is regarded arsenic a geologically prospective region. Indeed, the deposits astatine Vicuna's Josemaria and Filo del Sol mines are estimated to incorporate 13 cardinal metric tons of measured copper and 25 cardinal tons of inferred copper.

For ICMM's Dhawan, the imaginable value of BHP and Lundin's Vicuna copper task is extraordinary.

"It's of the aforesaid value to copper arsenic Western Australia was to robust ore — and I don't accidental that lightly. It is simply a bold examination to marque but it is 1 that I bash genuinely judge in," Dhawan said.

A spokesperson for BHP and Lundin's Vicuna copper task said past period that the 2 companies mean to use to person benefits nether RIGI, Reuters reported.

Argentina's renewed mining absorption comes arsenic planetary copper request is expected to skyrocket implicit the coming years, dramatically outstripping supply amid an artificial quality roar and a displacement distant from fossil fuels.

Analysts astatine consultancy CRU Group person estimated that the pipeline of Argentina's imaginable copper projects could correspond a astir $47 cardinal accidental for the system done to 2040.

This cumulative interaction is comparable to the grounds $44-billion bailout indebtedness Argentina received from the International Monetary Fund.

A authorities spokesperson did not instantly respond to a petition for remark erstwhile contacted by CNBC.

Asked whether Argentina's long past of boom-and-bust economical cycles means Argentina's copper dreams could crumble erstwhile again, ICMM's Dhawan said: "Where doesn't person that hazard is the question I would ask?"

He added: "I conscionable deliberation that radical person adjusted to a caller mean anticipation of rather important volatility and that has astir worked successful Argentina's favor. I deliberation 2 things person happened, I deliberation Argentina's stableness has gone up and the world's stableness has gone down."

Dhawan said it's not imaginable to foretell which mode Argentina volition go, but investors look to beryllium prepared for antithetic governmental and economical scenarios and that sovereign hazard has been priced in.

Mariano Machado, main expert for the Americas astatine Verisk Maplecroft, said that portion Argentina does person the minerals needed to reshape its export base, "policy consistency and societal licence volition find whether this is Argentina's mining infinitesimal oregon different mirage."

"The country's argumentation swings person kept concern beneath imaginable levels, and the government's nonaccomplishment to transportation lawmakers from the absorption Union for the Homeland (UP) to ballot for the RIGI means determination is simply a hazard that little backstage sector-friendly sectors volition quality its provisions if they marque a comeback," Machado told CNBC by email.