Argentina's President Javier Milei Seeks to Unlock Copper Potential Amid Global Demand

Argentina's President Javier Milei aims to unlock the country's copper potential, capitalizing on surging global demand for electrification and renewable energy. His administration has introduced a Large Investment Incentive Regime to provide tax, trade, and foreign exchange benefits to large-scale investors, including major players like BHP, Glencore, and Rio Tinto. The Vicuna joint venture between BHP and Lundin is considered a geologically prospective region with estimated copper deposits of 13 million metric tons. However, the success of Argentina's mining sector depends on policy consistency and social licence.

Argentina's President Javier Milei is spearheading an ambitious effort to unlock the country's copper potential, aiming to capitalize on the surging global demand for electrification and renewable energy. Milei, who won a shock election in 2023, has introduced a series of tough reformist measures to stabilize the traditionally volatile economy, with a focus on the mining sector, particularly copper and lithium.

One of the key initiatives is the Large Investment Incentive Regime (RIGI), a scheme designed to provide generous tax, trade, and foreign exchange benefits to large-scale investors over a 30-year period. To date, 20 projects worth just over $30 billion have sought entry into Argentina's RIGI, with three-quarters of these being in mining, and copper alone representing $16 billion [1].

Major players such as BHP, Glencore, and Rio Tinto are among those making bold bets on Argentina's copper and lithium potential. Ro Dhawan, CEO of the International Council on Mining and Metals (ICMM), described Argentina as "arguably the most exciting new copper story today," highlighting the country's geologically prospective regions and stable domestic political environment [1].

One of the most notable projects is the Vicuna joint venture between BHP and Lundin. Situated along the Chile-Argentina border, the Vicuna District is regarded as a geologically prospective region with estimated copper deposits of 13 million metric tons at the Josemaria and Filo del Sol mines [1]. However, the success of Argentina's mining sector depends on policy consistency and social license, according to Mariano Machado, principal analyst for the Americas at Verisk Maplecroft [1].

The renewed mining focus comes as global copper demand is expected to skyrocket over the coming years, dramatically outstripping supply. Analysts at consultancy CRU Group have estimated that the pipeline of Argentina's potential copper projects could represent a roughly $47 billion opportunity for the economy through to 2040 [1].

Despite the potential, Argentina's long history of boom-and-bust economic cycles raises questions about the sustainability of this mining boom. However, ICMM's Dhawan noted that investors appear to be prepared for different political and economic scenarios, and sovereign risk has been priced in [1].

In related news, Driehaus Capital Management LLC recently increased its stake in Southern Copper Corporation (SCCO) by 2.9%, owning over 1 million shares valued at approximately $98.98 million as of the latest SEC filing [2]. This move follows Southern Copper's announcement of a quarterly dividend increase to $1.01, up from $0.62, reflecting a 4.2% yield with a dividend payout ratio of 70.02% [2].

References:
[1] https://www.cnbc.com/2025/09/05/mining-milei-is-betting-big-on-copper-to-make-argentina-great-again.html
[2] https://www.marketbeat.com/instant-alerts/filing-driehaus-capital-management-llc-increases-stake-in-southern-copper-corporation-scco-2025-08-29/