BHP, Lundin bet $400M on Argentina copper hub

BHP (ASX, NYSE: BHP) and Lundin Mining’s (TSX: LUN) joint venture in Argentina is investing more than $400 million near the Chilean border, aiming to develop a multibillion-dollar copper project that could become the country’s next major production hub.

The venture, Vicuña Corp., was created in January after the partners acquired Filo Corp. It controls both the Filo del Sol deposit in straddling the border Argentina-Chile and the Josemaría deposit in Argentina’s San Juan province. 

The budget already places Vicuña among Argentina’s largest foreign investors this year, even as final development costs are still being calculated, José Luis Morea, Vicuña’s senior country manager for Argentina and Chile told Bloomberg News on Wednesday.

The company is also preparing an application for tax, customs, and currency exchange benefits under Argentina’s large investment incentives program, known as RIGI. Morea said RIGi would be vital to make the project competitive on taxes with other jurisdictions in Latin America and elsewhere. 

Shares in Lundin Mining fell 2.6% on Wednesday in Toronto to C$16.37 apiece as wider markets gained on expectation of a U.S. Federal Reserve interest rate cut. The company has a market valuation of C$14 billion. Stock in BHP fell 1.7% to $53.17 each in New York by midday for a market capitalization of $138 billion. 

2030 production 

Since the acquisition, Vicuña has carried out tests and pre-construction work at Josemaría, with plans to seek approvals and being production in 2030. The company 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.

Vicuña expects to submit a technical report to its board by March, outlining timelines, production forecasts, and processing methods.

To guide the next stage, the company appointed this week mining veteran Ron Hochstein as CEO. Hochstein brings more than three decades of industry experience, most recently serving as chair and CEO of Lundin Gold. He takes the helm on Nov. 7.

Argentina has not produced copper since 2018, but a growing pipeline of projects could elevate the country into the world’s top 10 producers.