432 kilometers from the city of San Juan and about 238 kilometers from Rodeo, in the northwest of that province, on the front Iglesiana mountain range, at 4,295 meters above sea level, Josemaría looms. This is a copper and gold mining project carried out by the Canadian corporation Lundin Mining, with resources of 6.7 million pounds of copper; 7 million ounces of gold; 31 million ounces of silver and a useful life of the deposit estimated at 19 years.
Along with Josemaría, Filo del Sol, Los Azules, Altar and Pachón are other copper projects that could revolutionize San Juan mining when they reach the production stage. This province represents 80% of Argentina’s copper supply, with resources estimated at 8,834 million tons.
Silently, this sector is running to become one of the heavyweights of the local economy. “Argentina is facing a historic opportunity because it continues to be attractive for potential mining investments since it has significant reserves of gold, silver, copper, iron and lithium,” highlights Alfredo Vitaller, vice president of Corporate Affairs at Proyecto Josemaría. In his vision, “the critical minerals for the energy transition, replacing fossil fuels, are lithium and copper, which are key to electromobility and the development of cleaner technologies.”
All projections have a basis: During 2022 it will generate US$ 4,000 million in mining exports and 100,000 jobs. Therefore, for Roberto Cacciolapresident of the Argentine Chamber of Mining Entrepreneurs, “it is an industry that is very present when talking about the sectors that will help the country get going. This is due, among other issues, to its role in generating employment and foreign exchange for the country.” Currently, it is the sixth export complex in Argentina. And although it is still far from equaling sectors such as agriculture, the fact that it is one of only three sectors that generates net foreign currency income places it in preference.
Potential. Adolfo Durañona, Principal Attorney at Baker & McKenzie, agrees with the present of the sector: “it is recovering,” he describes and is based on the fact that although shipments abroad “are low” compared to those of neighboring countries (in 2022: Chile US$ 97,491 million and Peru, US$ 37,711 million), “they still do not reach the peak of Argentine exports that was in 2011, with US$ 4,902 million, when the Bajo la Alumbrera project was in operation. Our neighbors have a greater mining tradition, closer proximity of the projects to the ports and, above all, greater economic stability,” says Durañona.
This industry is considered “young” in Argentina, since its main projects were installed just over 20 years ago. “The outlook is positive because at a global level an increase in the demand for minerals is expected from the change that is being generated driven by clean energy technologies and electromobility. In this sense, the fight against climate change requires the production of minerals to supply new technologies. And although this has a positive impact on all minerals, the role of copper and lithium will stand out,” says Cacciola. And both minerals are present in the local geography. Regarding copper, there are currently 20 projects in different stages. “However, Argentina still does not have production, a situation that we hope will be reversed in the coming years”, projects Cacciola. Large copper projects would generate about 4,000 jobs in construction and another 1,000 during operation. And in relation to lithium, there are three projects in production (one of them recently launched).
Lithium is the other great window of opportunity for Argentina. “It is the mineral that generates the most disbursement announcements, with projects that require more than US$600 million in investments for their start-up.to”, affirms Cacciola. Durañona agrees with this vision: “Argentina managed to grow in this sector, where there are large reserves and the mineral is affordable (unlike what happens in Chile) and that has aroused the interest of several foreign companies (Allkem, Rio Tinto, Eramet , Posco, Ganfeng, etc.) in the acquisition of projects”.
Argentina is already the fourth largest lithium producer in the world, after Australia, Chile and China, and in recent years several initiatives have moved from the exploration stage to construction, in Salta, Jujuy and Catamarca. In turn, metal projects continue to be the largest exporters (gold, silver, copper). “In copper there are scheduled investments that have a lot of potential and that if realized could generate multiplier impacts in their provinces (San Juan and Catamarca)”says Durañona.
The most benefited areas are the northern provinces, such as Jujuy, Salta, Catamarca and the western Andes, but to confirm with certainty the level of reserves that Argentina has, further exploration is needed, according to specialists. “It is estimated that more than 80% of the territory is still unexplored and the country needs to work much more to continue identifying and developing its potential,” says Vitaller.
By 2032, current export levels are expected to triple to reach US$12 billion annually. According to projections by the International Energy Agency, in 2040 the global demand for minerals and metals for clean energy technologies would double. And on the global map, “Argentina could become a leading player in helping to reduce the gap between current production and future demand for critical minerals in the energy transition, such as copper and lithium,” Vitaller concludes. The world seems to open the door to this Cinderella of the economy.
MARCELO ALFANO
by Marcelo Alfano
