Source: Mining Journal 01/16/2024
As its new president, Javier Milei, works to make the country more mining friendly, several companies are advancing projects to produce these two metals in demand for the global clean energy transition, noted a Mining Journal report.
Argentina is endowed with massive mineral riches, but bureaucracy, high taxes, and a lack of standardized rules and regulations have prevented the mining industry from affording the country the robust economy it has the potential for, reported Mining Journal in a January 2024 country supplement titled “Argentina’s Mining Renaissance: Unveiling the Lithium and Copper Wealth.” This situation, however, may be about to change under new President Javier Milei, who has said he favors a free enterprise system and welcomes foreign investment.
“If this is the case now, one could reasonably infer the country is set to become a mining mecca when prevailing economic conditions become more benevolent,” Mining Journal wrote. “At such time, Argentina will finally be presented with its opportunity to inherit the Earth.”
Out With the Old. . .
Mining Journal reported that unlike its neighbor, Chile, Argentina has been slow to capitalize on its mineral endowment, and it has made it difficult for mining companies to start and advance projects there. The related process involving governmental agencies has been rife with inconsistencies, inefficiencies, and red tape. Some factors hindering companies and the Argentine mining industry’s progress are the rate of export taxes, controls on foreign exchange, and constraints on imports of supplies, for example.
“This is now changing,” purported Mining Journal. Leading the anticipated shift is recently elected president of Argentina, probusiness Javier Milei. He aims to create an environment conducive to attracting the foreign investment that is required to support mining companies’ efforts and buoy the industry.
Generally, from voters to legislators, the country now agrees that mining is the antidote for its troubled economy, marked in part by high unemployment numbers, raging inflation rates and uncontrolled debt. The task of turning it all around has fallen on Milei.
Demand from Decarbonization
With this transformation, targeting mining, comes a great focus on two critical metals, in abundance in Argentina and essential for achieving net zero worldwide: copper and lithium. Of course, the production of historically core metals, such as gold and silver, continues as well.
“Lithium and copper projects, in particular, offer the country an opportunity to cash in on the global transition to green energy that will see demand for these two metals rocket,” Mining Journal wrote.
Along with these elements, according to Mining Journal, Argentina has well-developed infrastructure in its mining provinces. This includes road, rail and ports where needed, along with access to water and power. The existence of these essentials materially lowers capex for companies, “making the economic case for a range of projects even more compelling.”
In its article, Mining Journal looks at copper, lithium and uranium and names a company with an active project in each of these industry segments.
Copper Making a Comeback
Argentina boasts about 65,000,000 tons (65 Mt) of copper reserves, noted Mining Journal, mostly in the Andes. Several pending copper operations are of such a large scale that if they all advance to production, they could produce 1.2 Mt of copper per year. Currently, the country does not export any copper.
“This would mark not only a triumphant return for the dormant copper industry in Argentina but also help to meet what is likely to be a huge upcoming increase in demand for copper,” commented Mining Journal.
One such project, estimated to be in production by 2030, is Los Azules in the San Juan province, owned by McEwen Copper, a wholly owned subsidiary of McEwen Mining Inc. (MUX:TSX; MUX:NYSE). A recently updated preliminary economic assessment outlined at large, high-grade, low-cost, open-pit operation producing an average of 322,000,000 pounds of copper cathode over a 27-year life of mine. A key investor of McEwen Copper, holding a 19.4% interest in it, is global automaker, Stellantis N.V.
“The rationale behind the investment is to guarantee a reliable and sufficiently plentiful future supply of a key component used in electric motors, wiring, batteries, inverters, and charging stations,” Mining Journal explained.
Another copper project in San Juan is Lundin Mining Corp.’s (LUN:TSX) Josemaria. It is estimated this copper-gold-silver operation will produce 1,000,000,000 tons of ore at average diluted head grades of about 0.3% copper and 0.22 grams per ton (0.22 g/t) gold and a strip ratio of 0.98 over a 19-year mine life.
In Catamarca province is Glencore International Plc’s (GLNCY:OTCMKTS; GLEN:LSE) MARA open-pit operation, eventual production from which is expected to place the copper mine in the world’s Top 25.
Lithium Projects Galore
Argentina has 20 Mt of identified lithium reserves, earning it the runner-up spot to Bolivia. Most are located in the salt flats in the Salta, Catamarca, and Jujuy provinces, an area that comprises part of the Lithium Triangle. The remaining portions are in Bolivia and Chile. The Lithium Triangle hosts about 60% of the world’s known lithium reserves.
Today, more than 30 lithium projects are in development in Argentina. By 2027, lithium production there is forecasted to increase tenfold.
“This would place it on the path to being the leading Latin American supplier of lithium, surpassing Chile,” wrote Mining Journal.
One lithium player is Argentina Lithium & Energy Corp. (LIT:TSX.V; PNXLF:OTC; OAY3:FSE), with two projects in Salta province, Rincon West and Antofalla North, on midgrade salars and adjacent to properties held by Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK) and Albemarle Corp. (ALB:NYSE). Recently, Peugeot Citroen Argentina, a subsidiary of leading global automaker Stellantis, made a strategic investment in the company, for 19.9% interest, to help fund resource exploration at and prefeasibility study work on Argentina Lithium & Energy’s projects. An initial mineral resource estimate for Rincon West is expected this year, and a comprehensive drill program is planned for Antofalla North.
Uranium for the Producing
Also rich in uranium, Argentina can take advantage of the resurgence of pro-nuclear sentiment to eventually boast in-country production of the metal, Mining Journal asserted.
One company that could help it get there is Blue Sky Uranium Corp. (BSK:TSX.V; BKUCF:OTC; MAL2:FSE). Its 450,000 hectares of mining tenures in the Rio Negro province are prospective for low-development cost, near-surface uranium and vanadium resources. Blue Sky is advancing its flagship Amarillo Grande, comprising three deposits. A preliminary economic assessment was done in 2019 on one of them, Ivana, and since, a significant amount of drilling has been done.
Positive Signs Pre Milei
Given the lure of Argentina’s extensive mineral wealth, an increasing number of companies have opted to pursue the rewards there despite the risks, noted Mining Journal. As such, the mining industry began to improve before Milei won the presidential race, several metrics show. For instance, mining exports in 2023 are projected to be the highest they have been in more than a decade, totaling about US$4.5 billion.
“As the pioneers prove the trail they blazed is worth it, investors are taking a much keener interest in the country,” Mining Journal wrote.
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- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Argentina Lithium & Energy Corp.
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Disclosures for Mining Journal, January 2024
Aspermont Media, publisher and owner of the Lithium Outlook (‘the publisher’) and each of its directors, officers, employees, advisers and agents and related entities do not make any warranty whatsoever as to the accuracy or reliability of any information, estimates, opinions, conclusions or recommendations contained in this publication and, to the maximum extent permitted by law, the publisher disclaims all liability and responsibility for any direct or indirect loss or damage which may be suffered by any person or entity through relying on anything contained in, or omitted from, this publication whether as a result of negligence on the part of the publisher or not. Reliance should not be placed on the contents of this publication in making a commercial or other decision and all persons are advised to seek independent professional advice in this regard.
( Companies Mentioned: LIT:TSX.V; PNXLF:OTC; OAY3:FSE,
BSK:TSX.V; BKUCF:OTC; MAL2:FSE,
GLNCY:OTCMKTS;GLEN:LSE,
LUN:TSX,
MUX:TSX; MUX:NYSE ,
)
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