Argentine President Javier Milei plans to change the country’s glacier protection law to ease giant copper developments such as Glencore’s (LSE: GLEN) El Pachón and the joint BHP (NYSE, LSE, ASX: BHP), Lundin Mining (TSX: LUN) Vicuña, according to several media reports.
Milei, whose party won last month’s mid-term legislative elections, is expected to narrow the ice-fields law once Congress resumes Dec. 10, tying the reform to his push for investment through the RIGI tax-incentive program. In contrast to neighbouring copper powerhouse Chile, Argentina has no current red metal exports. The glacier tactic was first reported by the Buenos Aires Herald in June, and this week by MiningReporters.com and Bloomberg News.
“Several large copper mining projects in the Argentine side of the Andes face challenges from being located around rock glaciers and ice shelves – which can contribute to river basins and freshwater supplies,” BMO Capital Markets said in a note on Friday. “That said, President Milei will still need to get these reforms approved by Congress, albeit his representation was recently boosted in the midterms, and will now be in a much stronger position to gather a voting majority.”
The $9.5-billion capex El Pachón has been delayed by the glacier-protection rules and permitting hurdles. Other copper projects on the leading edge of development include the Vicuña joint venture managing the Filo del Sol and Josemaría projects, McEwen Mining’s (TSX, NYSE: MUX) Los Azules project, Aldebaran Resources’ (TSXV: ALDE; US-OTC: ADBRF) proposed Altar mine and First Quantum Minerals’ (TSX: FM) $3.6-billion capex Taca Taca.
Glaciers
An Argentine federal glacier inventory in 2018 mapped more than 16,000 glacial forms across its side of the Andes and where parts of proposed mining projects infringed on them. Many of the formations recorded have little or no ice and shouldn’t be used to block projects, the country’s Chamber of Mines argues.
McEwen’s Los Azules, which the government approved in September for RIGI, has no “white glaciers” on the property and the plan excludes most areas where there are rock glaciers — basically ice within the rock, CEO and chief owner Rob McEwen told The Northern Miner by phone on Friday
“We have what they call rock glaciers in a couple of areas,” McEwen said. “One is along our access road over one of the passes. We’re looking to change that route so we’re not infringing on it.”
Glencore’s El Pachón overlaps a rock glacier that San Juan province removed from its registry in 2023. The Swiss company is betting federal officials will follow suit.
Environmentalists warn that mining will irreversibly harm glaciers and mountain ecosystems, affect global temperatures and limit access to clean water while draining large volumes for industrial use. The country passed its glacier law in 2010 after protests, especially against Barrick Mining’s (TSX: ABX; NYSE: B) Pascua Lama project which remains stalled.
Vicuña
The Vicuña joint venture plans to produce a technical report by March outlining timelines, production forecasts and processing methods, with plans to seek approvals and start output in 2030. It also extended the mine’s useful life from 19 to 25 years after confirming higher-than-expected resources and set ore processing capacity at 175,000 tonnes per day.
Glencore in August applied for the El Pachón copper-molybdenum project to be part of RIGI as it advances feasibility, environmental and geotechnical studies. The high-Andes development prospect hosts about 6 billion tonnes of measured, indicated and inferred resources grading 0.43% copper, 2.2 grams silver per tonne and 130 grams molybdenum.
Detailed engineering is set to start on Los Azules with construction targeted for early 2027, subject to project financing, McEwen said. The RIGI program provides 30 years of tax and foreign exchange stability, a substantially lower tax burden and immediate value added tax recovery, he added.
Solar power
The CEO has long-pledged to make Los Azules a modern example for mining to use solar power, and limit water use with the Nuton process developed by a unit of Rio Tinto (NYSE, LSE, ASX: RIO).
In September, McEwen signed a collaboration agreement with the World Bank’s International Finance Corp. ahead of potential debt and equity financing. That followed joining the United Nations Global Compact last year to promote human rights, fair labour practices, environmental stewardship and corporate transparency.
The project, at 3,500 metres elevation in the Andes, would cost $3.17 billion to build and produce 148,200 tonnes of copper cathode at all-in sustaining costs of $2.11 per lb. over the mine’s 21-year life, according to a feasibility study issued in October.
Los Azules has a post-tax net present value (at an 8% discount rate) of $2.9 billion and an internal rate of return of 20%, with a payback period of 3.9 years, the study shows.
Altar
Altar would cost $1.59 billion to build and produce 108,579 tonnes of copper, 43,199 oz. of gold, and 570,217 oz. of silver annually for the first 20 years of a potential 48-year mine life, the company said Oct. 30 in a preliminary economic assessment.
Aldebaran reports total life-of-mine after-tax free cash flow of $10.7 billion using a base-case metal prices of $4.35 per lb copper, $2,500 per oz. gold, and $27 per oz silver. All-in sustaining costs would be $2.25 per lb., it said.
“The manageable initial capex and proven processing method reinforce Altar’s appeal as a highly developable project at a time when copper is at record highs,” Red Cloud Securities mining analyst Taylor Combaluzier said in a note then. “Altar is one of the largest undeveloped copper projects in the world and we believe it should be sought after by major mining companies.”
Taca Taca
First Quantum is applying for Taca Taca, its most advanced greenfield project, to be accepted in the RIGI program. The project is planned as a 32-year open-pit mine and ore processing plant to produce up to 275,000 tonnes of copper per year along with gold and molybdenum by-products.
Provincial permitting is moving well and, despite inflation, costs will remain reasonable, CEO Tristan Pascall said on an Oct. 29 earnings conference call.
“We would like to have a technical report 43-101 out at the end of this year or early next year,” Pascall said. “We’re dotting the I’s and crossing T’s on the engineering studies around that. The drilling and the resource definition is well in hand, but also in terms of the environmental and water permitting process around what the project looks like will define that final picture.”
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