Mining, Mining Technology, Projects Tagged

Argentina Copper Pipeline – Update for Suppliers

Argentina is blessed with natural resources, but the sector is still underdeveloped and holds significant potential that remains untapped. This is set to change over the next few years with a renewed focus by industry players who see the potential of world class deposits both in copper and lithium.

To date, gold and silver production have historically been the most significant contributors to the Argentine mining industry. The country is currently the third-largest gold producer in South America and the tenth-largest silver producer in the world.

In terms of copper. Argentina is now the fifth-largest producer in South America, but it has no stand-alone mines. Most of the production comes as a byproduct of its gold and silver mines. This will change as there are 6 large-scale projects projects along the Chilean border that are starting to progress which could significantly increase copper production to over 1.2Mt/y of copper before 2030.

Current Situation in Argentina 

Argentina has a large pipeline of lithium and copper projects, but the political and economic situation is making things difficult for the industry. The first issue is inflation, which currently is over 100%, devaluing the Argentian peso. By itself. this is not a large issue for the industry since mining companies are either receiving investment in dollars or selling minerals in dollars. They can exchange and make payment to local suppliers in pesos which should make local purchases cheaper.  

The second issue is that there is a large difference in the official and unofficial exchange rates. This difference between the two is approx. 80%. For example, today the official rate is 210 and the blue rate (the unofficial rate) sits at 389. The blue rate is the unofficial rate, but it is used so commonly in the country that the rate is published in newspapers. This affects the industry since the blue rate is much closer to what the real rate should be but when companies bring money in from abroad, they need to convert using the lower government rate. 

The third issue is that the government has limited imports for companies making it difficult to receive and pay for important inputs. President of the Argentinean Chamber of Mining, Franco Mignacco, stated in the local media that import procedures for the mining industry “must be streamlined,” adding that companies in the sector should have access to the free exchange market to cover import payments and services provided by foreign firms.

All of these issues make it difficult for mining companies and service companies to do business in Argentina. The mining industry needs to be able to bring in technology and inputs from outside the country while also having a healthy ecosystem of local suppliers that can provide services inside the country.  

With current currency controls, it is difficult to find financing for capital-intensive projects, it is difficult to pay foreign suppliers, and nobody wants to have local operations since there is no way to bring in goods or move money to the outside the country.

The good news is that Argentina will have elections later this year with many being optimistic as to what could happen. Many are predicting that given the economy, changes will need to be made to stabilize the situation. It will be necessary to progressively reduce import controls and export taxes, in addition to standardizing the exchange rate. 

Project Pipeline


The US$4.06bn Josemaría project is owned by Lundin Group. The silver-gold-copper project is expected to start operations in 2026. Lundin Mining acquired Josemaria Resources for an equity value of approximately C$625m ($485m) in December 2021. 

  • The mine will have a life expectancy of 19-years and will produce 131,000t/y copper, 224,000oz/y gold, and  one million ounces of silver.
  • Josemaría would generate 4,000 new jobs during construction and 1,000 while in production
  • Lundin will spend US$400mn in 2023 to advance the project. Capex primarily include continuation of detail engineering, procurement of long-lead equipment, and preconstruction activities such as road upgrades and geotechnical work..
  • The Josemaria copper-gold project is located approximately 10km from the Chilean border and 140km from Copiapo, Chile.
  • Conventional open-pit mining method, involving drilling and blasting followed by loading and hauling by autonomous trucks, will be employed at the Josemaria copper-gold project.
Mara (formerly Agua Rica) 

The US$2.39bn Mara project (formally Agua Rica) project is controlled by Yamana (56.2%), Glencore (25%) and US miner Newmont (18.75%).  MARA is the combined project comprised of the Agua Rica site, Alumbrera site, as well as the Alumbrera plant and ancillary buildings and facilities, and will rely on processing ore from the Agua Rica mine at the Alumbrera plant.

  • With proven and probable mineral reserves of 11.7 billion pounds of copper and 7.4 million ounces of gold contained in 1.105 billion tonnes of ore with an initial mine life of 28 years.
  • The project is to produce some 241,000t/y of copper for 28 years, will use Alumbrera’s infrastructure which includes a processing plant, tailings facilities, pipelines and auxiliary buildings, among others. 
  • MARA will be among the top 25 copper producers in the world when in production, and one of the lowest capital intensities of comparable projects globally.
  • The project will be mined via a conventional high-tonnage truck and shovel open pit operation.
Los Azules

The US$2.4bn advanced exploration project is located approximately 80 km west northwest of the Calingasta town and 6 km east of Argentina’s border with Chile, at 3,500 m elevation in the Andes Mountains. Los Azules is one of the world’s largest undeveloped high grade open pit copper projects that contains significant further growth potential. It is anticipated to be the world’s 25th largest copper producer and a lowest cost quartile producer.

  • Initial capex requirement of $2.4 billion with payback occurring after 3.6 years.
  • Production would reach 186,000t/y of copper in the first 13 years of a 36-year mine life at a cash cost of $1.14 per lb.
  • The concentrator plant will have a throughput rate of 80,000t/d in the first phase, which will increase to 120,000t/d in a second phase to begin after the fifth year of production.
  • The company recently finished constructing a new, low-altitude northern access road to provide year-round access to the site. The current exploration road is only passable about five months a year.
  • The goal is to move the project to the pre-feasibility stage over the next year and a half.
Taca Taca 

The US$3.27bn Taca Taca is an open-pit copper, molybdenum and gold mining project owned by First Quantum. The project is located in Argentina, approximately 230km west of the provincial capital city of Salta and approximately 55km east of the Chilean border. First Quantum is expected to have an investment deicison in 2024.The total investment on the project is estimated to be $3.6bn .

  • Taca Taca is set to produce 275,000t/y copper, 106,880oz/y gold and 2,914t/y molybdenum over 32 years. 
  • The mine construction would generate around 1,300 new jobs.
  • The company is in the process of obtaining operating permits, including for the use of power lines, water rights and road construction.
  • The project will utilise the conventional open-pit method involving drill, blast, shovels and trucks operations. The near-surface material is expected to be mined through free-digging method, while the drill and blast methods will be employed as the mining depth increases.
  • There are plans to use, where applicable, trolley assisted trucks for ore and waste haulage. Haulage cycle times can be significantly reduced for trucks receiving direct electric power to their wheel motors. 
Filo del Sol

The US$1.27bn Filo Del Sol project is owned by Filo Mining. The project also sits on the the border of Argentina’s San Juan province and Chile’s Atacama region. A pre-feasibility study of the project was completed in January 2019 but the company has continoued exploration dirlling increasing resources since the study was completed. 

  • Average copper production is estimated at 67,000t/y over 14 years, for an investment of US$1.27bn.
  • Open-pit mining methods involving drilling and blasting followed by hydraulic shovels and front-end loaders. 
El Pachón

The US$5.6bn El Pachon project belongs to Glencore. The greenfield copper project is located in Argentina’s San Juan province, just 5km from the border with Chile.

  • The US$5.6bn for average production of 350,000t/y for 25 years.
  • The company continues to carry out the environmental impact report and the feasibility study, which it expects to complete in 2023.
  • Glencore has stated publicly that it is open to the possibility of bringing on a partner.



The Argentian mining industry has never been able to grow like its neighbors, Chile and Peru. In fact, many of the projects mentioned above have been around for many years but have been in a hold pattern given the country’s complex issues. This is changing though. 

The government understands that mining can be a huge pillar for the Argentinean economy while also bringing in much needed dollars. In response, the government has been trying to make small changes that encourage investment in the sector. In addition, private companies have a renewed interest in the country and are moving to finally advance projects that have been frozen for years. 

Argentina has a serious reputational problem that needs to be dealt with but it is clear that the worlds appetite for critical minerals is giving investors the confidence to invest in the country with the hope that the problems will solve themselves over the next few years. 

For suppliers, Argentina will be a great market when projects start to advance but until there is more certainty after the elections, it is better to sit and wait. Argentina is on the cusp of doing something interesting, but it is not quite there yet. 

Ax Legal is an advisory firm that works with foreign companies in Latin America. Our team of legal and commercial advisors have a distinguished track record of helping foreign technology and services companies to grow and operate in Latin America. Over the years, we have worked with starts up, mid-size businesses, and publicly listed companies. The one common factor that connects our clients is that they are leaders in their field, providing innovative technologies and services to the industrial sectors.

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