Milei’s win cements US partnership in Argentina

Argentina’s bid to unlock its vast lithium, copper, oil and gas reserves has gained fresh momentum after President Javier Milei led his far-right party to a landslide victory in Sunday’s midterm elections. 

The sweeping win consolidates his hold on power and strengthens his alliance with Washington, analysts say. It follows two turbulent years marked by Milei’s radical spending cuts and deregulation measures aimed at stabilizing the economy. The victory also comes after a campaign in which U.S. President Donald Trump announced a $40-billion bailout for Argentina and tied continued aid to Milei’s success at the polls.

The package consists of a $20 billion currency swap line and another $20 billion in loans from private banks and sovereign wealth funds. The swap line allows Argentina’s central bank to exchange its devaluing pesos for stable U.S. dollars, helping alleviate a liquidity crisis. The loans shore up the country’s ability to manage debt payments. 

As Milei’s administration embarks on the second half of its term, analysts say the political stability provided by the vote result could prove decisive for Argentina’s efforts to develop its energy and mining potential. The bailout is controversial and has been criticized as being politically motivated, given the close alignment between Trump and Milei, and how Trump supporters in the investment community stand to gain. 

Fragile coalition

Milei rose to power on a wave of outsider appeal but without an established political base. Before the midterms, analysts had cautioned that a loss of more than 10 points could trigger market volatility and weaken Milei’s congressional leverage. His coalition, La Libertad Avanza, remains fragile, and a 14-point defeat in Buenos Aires province exposed the limits of his combative style. 

“Milei understands he must now build consensus,” political reporter Gabriel Ziblat said ahead of the elections. “He can’t govern by aggression alone.”

Despite earlier political uncertainty, Argentina’s economy has shown rare signs of stability. The American aid underscores Washington’s strategic bet on Milei’s reforms and the country’s mineral wealth.

“It’s a major wager,” Ryan Berg of the Center for Strategic and International Studies, said last week. “If Argentina succeeds, it could become the model for deeper U.S. partnerships across Latin America.”

For the $20 billion private lending facility component of the U.S. bailout to Argentina, investment firms BlackRock, Fidelity, and Pimco have been identified in news reports as potential beneficiaries due to their significant holdings of Argentine debt. Billionaire hedge fund managers Rob Citrone of Discovery Capital Management and Stanley Druckenmiller also have sizable investments in Argentina and stand to gain. 

Druckenmiller and Citrone both worked with Treasury Secretary Scott Bessent, who approved the bailout, when Bessent managed funds for George Soros. 

Lithium, oil and gas

For investors, Argentina’s natural resources remain a powerful draw, provided infrastructure and political stability catch up. “The provinces are where the real opportunities lie,” Argentine journalist Guadalupe Vázquez said. “But none of it works if the macroeconomy collapses.”

Ziblat argued that credible macroeconomic management and deeper provincial engagement from foreign investors, especially from the U.S., will decide whether the mining sector accelerates or stalls.

Berg described Washington’s $20-billion Exchange Stabilization Fund commitment as both a strategic gamble on Milei’s reform path and a signal that Argentina can offer predictable conditions for large-scale projects. Confidence, he noted, is crucial in mining, where long lead times and heavy capital costs demand policy continuity.

Not since the free-market revolutions of 1990s Eastern Europe has a leader attempted to rewrite the investment playbook so completely, and so quickly, as Milei. Already, he’s witnessed the $4.1-billion BHP (ASX: BHP) and Lundin Mining (TSX: LUN) tie-up over Filo Corp. in the country, as well as Rio Tinto’s (ASX: RIO) $6.7-billion purchase of Arcadium, which has two of its three lithium projects in Argentina.

Infrastructure, stability

Infrastructure, however, remains the sector’s main bottleneck, the commentators said. Many high-grade deposits sit far from paved roads and export hubs, inflating costs and slowing timelines.

Analysts pointed to the revival of the Belgrano Cargas state-owned freight network, now moving to tender with open-access rules that allow mining firms to operate their own trains, as evidence that the government is prioritizing logistics to connect northern mining provinces with ports.

Integrating rail into mining production enables the sector to move large volumes of raw materials and key components required for the installation and operation of mining projects, a costly process demanding major investment, they said.

Clear rules

Regulatory stability is emerging as the other critical pillar. The government’s Regime for Large Investments (RIGI) seeks to anchor multibillion-dollar projects with tax and legal certainty while promoting coordination with provincial governors, who control key mining permits under Argentina’s federal system. Analysts said U.S. firms should “go local,” following China’s province-level strategy that has led to swift deals often bundled with infrastructure.

If the current policy mix endures, analysts expect an industrial and export surge led by the Vaca Muerta shale formation. Oil alone could generate about $30 billion annually within five years, which is roughly on par with Argentina’s historic soy exports. Shale gas, lithium and potential copper output could further strengthen the country’s role in global energy transition supply chains.

However, market jitters over exchange-rate policy and election outcomes can quickly unsettle financing conditions, commentators warned. Sustained coalition-building and disciplined communication will be as vital as the legal framework itself.