BHP-Lundin Joint Venture Targets Argentina's $2B Copper Push Under New Incentive Regime

BHP Venture Seeks Argentina Incentives for Major Copper Project
A joint venture between BHP Group and Lundin Mining Corp. has submitted an application to Argentina's investment incentives program for a large-scale copper project. The initiative, known as Vicuña, aims to establish a significant production hub in San Juan province, bordering Chile. Argentina's RIGI program offers tax, customs, and currency benefits to qualifying projects, signaling a strategic move to attract foreign capital according to reports.

The venture, which includes the Josemaría and Filo del Sol deposits, is seeking long-term stability through the RIGI program's PEELP category. This framework requires a minimum $2 billion in investment over the first two years of approval.

BHP and Lundin Mining, through their joint operation Vicuña Corp., emphasized their confidence in Argentina's investment environment under President Javier Milei's administration.

The application reflects the scale of the project and the companies' long-term commitment to Argentina's mining sector. Vicuña aims to position itself as one of the largest foreign investment projects in the country, with plans to release a technical report in early 2026. The project could become a cornerstone of Argentina's copper production in the coming decade.

A Strategic Push for Argentina's Copper Industry

Copper demand is surging globally, driven by the energy transition and the rise of electric vehicles. Argentina, traditionally known for its oil and agricultural resources, is now looking to leverage its copper potential. San Juan province, where the Vicuña project is located, is emerging as a key region for mining development. The joint venture's application aligns with Argentina's broader goals to diversify its resource base and attract investment.

The RIGI program, particularly the PEELP category, offers tailored incentives for long-term export projects. These include lower corporate and dividend tax rates, exemptions from export duties, and streamlined repatriation of revenues. The program also provides 40 years of regulatory stability, a critical factor for large-scale mining operations. Vicuña's application is the first of its kind for a copper project in Argentina, setting a precedent for future developments.

Copper Market Dynamics and Investor Sentiment

The global copper market is in a bullish phase, with prices reaching record highs. This has increased the urgency for companies to secure new sources of supply. BHP, in particular, has been shifting its focus toward copper as a growth driver. The company recently sold a portion of its Pilbara power network to fund expansion in high-return copper projects. This strategic move highlights the sector's importance in BHP's long-term plans.

Vicuña's application also underscores the confidence of major mining firms in Argentina's evolving investment climate. The country has historically struggled with capital controls and regulatory uncertainty, but recent policy reforms have improved investor sentiment. President Javier Milei's administration has been instrumental in restoring trust, emphasizing transparency and long-term stability. This environment is critical for projects like Vicuña, which require multi-decade planning and significant capital according to analysis.

Looking Ahead: Challenges and Opportunities

While the RIGI program provides a favorable framework, the Vicuña project still faces hurdles. Environmental and community concerns must be addressed, as large-scale mining operations often face resistance. Water management and infrastructure development are also key challenges, particularly in a remote area like San Juan. The project will need to demonstrate responsible development practices to gain and maintain support according to experts.

For now, the focus is on completing the technical report and securing approvals. The joint venture is optimistic about the potential for shared infrastructure and economies of scale. With Argentina aiming to become a more prominent player in the global copper market, the success of projects like Vicuña could reshape the country's mining sector.