By Lucila Sigal
SAN JUAN (Reuters) -Argentina holds rich copper deposits in the mountainous north along the Chilean border, but, unlike its mining powerhouse neighbor, has not built power lines and roads needed for new projects backed by miners such as BHP and Rio Tinto.
President Javier Milei’s austerity campaign to clamp down on inflation and debt means the South American country is up against bigger challenges than most countries to build the infrastructure needed by mines worldwide.
Unconventional ideas, such as sharing infrastructure between miners or paying for it with royalties, will likely be part of the solution.
“The government said it won’t provide any funding, but that doesn’t mean it isn’t responsible for getting things done,” said Roberto Cacciola, president of Argentina’s mining chamber, who is urging authorities to step up efforts to ensure infrastructure gets built.
Argentina exports gold, silver, and lithium but has not produced copper since 2018.
Milei’s administration, as well as governors who control local development, are banking on copper to help stabilize the country’s volatile economy, just as mining companies worldwide seek to boost output to cover a looming supply gap for the metal widely used in construction and electric vehicles.
A federal official said the government is assessing infrastructure needs nationwide and identifying ways the private sector could play a role.
Eight copper projects in Argentina could bring total mining export value to $15.4 billion by 2030, according to a government forecast.
That would more than triple last year’s figure and make the sector one of the country’s largest net foreign exchange earners. Copper projects alone could reel in $5.2 billion by 2030, if they reach the government’s projection of producing 521,000 metric tons a year.
The copper projects are concentrated in the northern province of San Juan, which some call the “Vaca Muerta of copper,” an allusion to Argentina’s shale oil and gas field the size of Belgium.
San Juan enacted a compensation program in 2022 that could help get infrastructure built. It allows mining companies that develop road or energy infrastructure to be repaid with mining royalties if provincial legislators deem the project a “public utility.” Miners normally pay royalties to governments.
The Vicuna project, from global miner BHP and Canada’s Lundin, hopes to use the provision, said Vicuna’s Argentina director Jose Morea.
“That speeds up investments that the private sector is currently in a position to make … which the provincial government would probably have to defer otherwise,” he said in an interview.
