Argentina has some of the world’s largest copper reserves, and with the global copper demand expected to soar over the coming decades, its government is looking to exploit the resource. Argentina produces around 4,000 tonnes per year of copper, compared to neighbouring Chile, which produces around 5.5 million tonnes a year. However, it is home to an estimated 75 million tonnes of the metal, with the world’s sixth-largest reserves, giving it significant potential to develop the resource.
Argentina has a long history in mining, with a portfolio of around $30 billion and more than 100 projects, around 50 percent of which are copper. The South American state also has vast deposits of lithium, aluminium, boron, iron, molybdenum, potash, uranium, vanadium, and zinc.
The global copper demand is expected to grow by as much as 70 percent, to over 50 million tonnes a year by 2050. However, at the current rate of project development, the International Energy Agency (IEA) expects the supply of copper will fall short of the 2035 global demand by around 30 percent. In May, Fatih Birol, the executive director of the IEA, said, “This will be a major challenge. It’s time to sound the alarm.”
Therefore, developing Argentina’s resources could provide a stable source of revenue for several decades, as the global demand for copper continues to increase in line with the green transition, the rollout of electric vehicles, and the massive technology boom being seen. However, achieving this development will require a huge investment in the country’s mining and processing infrastructure.
Despite holding vast copper reserves in its mountainous north, along the border with Chile, Argentina has not developed the transmission lines and roads needed to support new project development. In addition, President Javier Milei’s campaign for austerity means that Argentina has seen little investment in its infrastructure in recent years, leading companies to discuss the potential for alternative options, such as sharing infrastructure between miners or paying for it with royalties. Roberto Cacciola, president of Argentina’s mining chamber, said in August, “The government said it won’t provide any funding, but that doesn’t mean it isn’t responsible for getting things done.”
Several government officials have voiced support for the development of Argentina’s copper industry as a major source of revenue. A government analysis suggested that eight copper projects across the country could together contribute a total mining export value of $15.4 billion by 2030, more than triple the 2024 export value, with copper accounting for $5.2 billion of this revenue if Argentina can achieve its goal of 521,000 metric tonnes a year of production.
In August, the mining company Glencore announced aims to produce almost 1 million tonnes a year of copperat its planned El Pachon and Agua Rica projects over the next 10 to 15 years. The firm recently applied for the government’s Large Investment Incentive Regime (RIGI) and said it planned to invest $4 billion in the development of Agua Rica and $9.5 billion in El Pachon. Glencore’s Argentina CEO Martin Perez de Solay said he expected copper output to total around 500,000 tonnes a year initially before expanding operations to produce more of the critical metal.
In September, President Milei said he had introduced a range of reformist measures aimed at stabilising the country’s economy to “Make Argentina Great Again.” One of these measures focuses on the expansion of the country’s mining industry, particularly on copper and lithium.
Milei introduced the RIGI scheme to offer investors generous tax, trade, and foreign exchange benefits over 30 years. To date, the RIGI scheme has attracted over $30 billion in investment across 20 projects, with three-quarters in mining, according to the global risk intelligence firm Verisk Maplecroft. Copper is thought to account for around $16 billion of this total, showing the high level of investor interest in the industry.
The mining majors BHP, Glencore, and Rio Tinto are all betting big on Argentina’s copper and lithium potential. Meanwhile, the CEO of the trade body, the International Council on Mining and Metals, Ro Dhawan, recentlysaid that Argentina was “arguably the most exciting new copper story today.”
The Americas analyst at Verisk Maplecroft, Mariano Machado, said that Argentina is highly promising in terms of its copper potential, but “policy consistency and social licence will determine whether this is Argentina’s mining moment or another mirage.” Machado added, “The country’s policy swings have kept investment below potential levels, and the government’s failure to persuade lawmakers from the opposition Union for the Homeland (UP) to vote for the RIGI means there is a risk that less private sector-friendly sectors will dispute its provisions if they make a comeback.”
There is significant potential for Argentina to rapidly expand its copper mining sector at a time when the global demand for the critical metal is expected to soar. Copper could contribute a major source of revenue for the coming decades if developed, providing greater economic stability for the South American country; however, to achieve this, the government must introduce favourable mining policies and reassurances to investors.
By Felicity Bradstock for Oilprice.com
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