Cry? Argentina's laughing as companies flock to join its mining industry

News.com.au

2 days ago

Argentinean President Javier Milei's investment-friendly policies are helping draw mining companies
This is combined with the lure of rich, yet underexplored ground across the country
Minerals such as lithium, copper and gold are some of the big drawcards for explorers and miners alike
Argentina is increasingly being seen as an attractive destination for resources investment, standing out even amongst the other well-endowed jurisdictions of South America.
Regardless of how one might view maverick President Javier Milei, who swept to power in a landslide victory in December 2023, credit must go where credit is due.
His economic reforms have certainly contributed to the creation of a more dynamic and business-friendly environment in the country.
This includes the introduction of policies such as the Large Investment Incentive Regime (RIGI) that offers tax, customs, and exchange rate benefits for investments of more than US$200 million.
One key beneficiary of this policy is Rio Tinto's US$2.5bn Rincon project in the Rincón Salt Flat, Salta, which will include a processing plant capable of producing up to 60,000tpa of battery-grade lithium carbonate.
Other miners and explorers are taking note.
'Argentina is really positioning itself as a top-tier mining destination and this is something that largely wasn't there ten years ago,' Pursuit Minerals (ASX:PUR) managing director Aaron Revelle told Stockhead.
'The Milei government has really opened up the country, and they started that with the oil and gas sector. They've now really moved that into mining.'
He also pointed to the 30-year Fiscal Stability Guarantee under the Mining Investment Act that covers exploration through to project maturity and really enhances the long-term investment security as another positive factor.
'There's also growing global governance and transparency standards,' Revelle added.
'Argentina now enjoys the strong support of the IMF, which is another key reason why it's such an attractive mining destination.
'Milei's very well received despite his eccentric nature across a lot of governments, especially in Latin America.
'He's showing that Argentina is tired of the old Peronist rule. People want jobs, they want lower taxes, they want lower costs of living, and I think his policies are really giving him a good standing there.'
Rich mineral bounty
Argentina's transformation isn't all thanks to Milei though.
It has been one of the top three performers in the region since 2018 and has regularly outperformed both Chile and Bolivia, the other two prongs of the famous Lithium Triangle, thanks to having the most attractive tax code.
This has contributed to the 77.1% increase in exploration expenditures between 2021 and 2023 to US$427m.
It also owes a large part of this growth to its vast strategic mineral resouces.
'Argentina holds the third largest lithium reserves globally as part of the famed lithium triangle alongside Chile and Bolivia,' Revelle added.
'You look at the emergence of copper, you know, which is becoming a juggernaut there. Taca Taca in the Salta province, but also the Filo del Sol project up in San Juan.
'Then looking at other commodities – gold. (In) Santa Cruz, you've got Cerro Negro, a famed tier-1 Newmont deposit.'
More importantly for junior explorers such as Pursuit, Argentina remains largely underexplored.
Challenger Gold (ASX:CEL) managing director Kris Knauer agrees, telling Stockhead that Argentina doesn't just have attractive geology. It is also very immature compared to jurisdictions like Chile or Ecuador.
Argentina also benefits from a high-quality, skilled mining workforce that's readily available.
That's on top of significant infrastructure, with well-established road, rail and ports across its mining regions as well as stable access to electricity and water.
Revelle points out that the individual provinces control mining rights. The Federal Government's key role is its courting of direct foreign investment.
'There are several major provinces that are constantly flying the flag, with their governors regularly attending PDAC to attract investment,' he added.
This combination of business friendly policies, mineral riches and available infrastructure has led major miners such BHP, Lundin, Ganfeng and Eramet to make significant investments in the country.
ASX players
Given all the advantages, there's certainly no shortage of ASX-listed companies operating in Argentina.
Pursuit is focused on its Rio Grande Sur lithium project that has a resource of 1.104Mt lithium carbonate equivalent.
It's doubled down on Argentina, with the company recently divesting its WA gold prospects and is evaluating other opportunities in the country.
'There's plenty of opportunity, and we're seeing some amazing prospects that may not have actually been there or available to us five to ten years ago in terms of political constraints or things like that,' Revelle said.
'Over the next 12 months, we will look at Argentina and the lithium market, which we think will eventually rebound and come back as demand continues to grow.
'If there was an exceptional opportunity in South America we would potentially look at it, but for us we are very comfortable in lithium, very comfortable in Argentina, and really just developing opportunities within the country. We expect the country to continue to grow."
Revelle didn't discount other minerals, noting that gold, copper and silver are very prospective in Argentina.
The company recently produced high-purity lithium carbonate samples from its 250tpa pilot plant using synthetic brine chemically identical to that of the Rio Grande Sur lithium project.
To enhance product quality and simulate potential refinement steps at commercial scale, a portion of this material was further treated at bench scale using fractional crystallisation (FX) and ion exchange (IX) techniques.
These post processing steps upgraded the product to 99.5% purity, meeting established benchmarks for technical-grade lithium carbonate.
Samples will be used by potential partners for product qualification and assessment purposes, representing a critical milestone in Pursuit's commercial strategy.
Challenger Gold is focused primarily on its Hualilan gold project in Argentina's San Juan province that has a resource of 2.9Moz of gold with a high-grade core of 1.6Moz at 5g/t gold.
In June 2025, the company unveiled a toll treatment PFS that outlined attractive returns, despite using conservative spot prices of US$2500/oz for gold and US$27.50/oz for silver.
The three-year toll milling strategy delivers an estimated EBITDA of A$136 million, a post-tax NPV of US$50.5 million, and cumulative post-tax free cash flow of US$56.7 million.
Using a gold price of US$3300/oz, a touch below spot, this EBITDA increases to A$221 million.
The toll mining operation is based on just 3% of project's current resource and requires a modest upfront capital investment of just US$8.9 million (A$13.8m), with a rapid payback period expected by December 2025, only three months after mining begins.
Mining will be focused on three shallow open pits producing 465,000 wet metric tonnes of mineralised material, with an average mined grade of 6.2g/t gold and 35g/t silver.
A production target of 76,600oz payable gold and 338,500oz silver has been set out with a life-of-mine strip ratio of 6:1 and a forecast mining cost of US$8.12/t.
Ore will be hauled 165km on a sealed highway to the fully permitted Casposo plant, where recoveries of 84.4% gold and 65.7% silver are expected.
Knauer said the company will cross a number of milestones by the end of the year.
'There'll be first drill and blast, first mining, first processing of all, first cash flow, that's all by the end of this year. That will happen in the next five months,' he said.
'You will also see some infill drilling results from the higher grade pits there as part of that, but really for us the next five months is about executing and delivering cash flow and producing gold.'
This initial toll milling operation will effectively 'bootstrap' the company into the larger operation, likely to come into focus in early 2026.
'You'll have a ... study showing what the larger project now looks like and the scale of it, which will be in the first quarter next year,' he added.
The broader project is already fully permitted and has the first EIA approved in San Juan gold mining for over 10 years.
An EIA amendment is needed for trucking the ore to the toll mill, along with an explosives approval for drill and blast contractor Orica, with Knauer saying time frames have been as expected.
On the copper front, Belararox (ASX:BRX) operates the Toro-Malambo-Tambo (TMT) project down the road from BHP and Lundin's Filo Del Sol copper deposit, recently revealed to be among the largest global copper finds of the past 30 years in a hint the underexplored Vicuna border region of Argentina and Chile could host more tier-1 copper projects.
Recent Phase 1 drilling tested two of several high priority target areas with the Tambo South target returning wide and continuous anomalous copper zones.
Geological interpretation has indicated multiple intrusions with varying extents of copper mineralisation with suggestions that the upper parts of the copper porphyry target have been tested successfully.
A magnetotellurics geophysical survey is planned at Toro South and Tambo to characterise the most prospective zones for follow-up drilling.
American Salars (CSE:USLI) acquired the Cauchari Ines 01 lithium brine project in May 2025.
The project covers about 1235 hectares over part of the 2550km2 Cauchari Salt Lake basin – a proven producing salar – and is known to contain lithium concentrations, with sampling returning up to 383ppm lithium from a depth of 30cm below the salt crust.
It is located about 13km from Rio Tinto's Rincon salar – an approved US$2.5 billion development that will eventually export 60,000tpa of lithium carbonate – and about 80km from the town of San Antonio de Los Cobres with access provided by existing mining tracks and roads.
There is also immediate proximity to railroads, electricity and gas pipelines.
Cauchari Ines 01 sits within a known geological district with significant lithium and potassium sampling and is near the San Antonio de los Cobres and Pocitos industrial centre.
Mineralisation in the Cauchari Salar include borates, sulphates, carbonates and brines rich in lithium, potassium, boron and rare earths.
Significant concentrations of lithium were determined in brines from the Cauchari Salt Lake area at the northern end of the company's claim boundary.