Investing in Argentina's mining boom

Mining is essential for decarbonisation. With critical minerals playing a vital role in the production of digital and clean energy technologies, Latin America, home to a significant share of the world’s critical mineral reserves, is uniquely poised to power the global energy transition.

As the global energy transition accelerates, the critical minerals market is expected to more than double by 2040, according to the International Energy Agency (IEA). Latin America, with its vast and underexplored reserves, has great potential to rise to the occasion. However, to scale up exploration and production, the region must urgently attract large pools of investment.

To that end, several countries are introducing legislative changes to entice foreign investors. One strident example is Argentina’s new Incentive Regime for Large Investments (RIGI). The recently introduced RIGI regime offers a range of tax, customs, and exchange incentives for large-scale investment projects, with the mining sector expected to benefit substantially from these measures.

Argentine opportunities

Argentina is on the cusp of becoming a major player in the production of several critical minerals, thanks to its rich deposits of copper, gold, silver, lithium, and zinc, along with vast, underexplored mining regions.

Despite sharing similar geological features with neighbouring Chile—the world’s leading copper producer and second-largest lithium producer— Argentina's mining sector remains significantly underdeveloped. In 2022, Argentina's metal exports totalled just $3.9 billion, a stark contrast to Chile's output, which was 15 times higher, according to the Argentine Chamber of Mining Companies (CAEM).

There are signs of improvement. Despite economic instability, Argentina’s lithium sector has taken off, becoming the world’s fastest-growing and set to become its third-largest by 2030. The country is now seeking to replicate this success in copper – where, arguably, its greatest untapped potential lies.

Despite holding the world’s fourth-largest known reserves, the country currently produces minimal copper, with just one active mine. However, rising global demand for minerals and recent business-friendly reforms are positioning Argentina as an increasingly promising frontier for the red metal – with potential for the country to become a top-ten global copper producer by 2030.

Substantial challenges

Despite the opportunities, the country also poses substantial challenges. These challenges arise from Argentina’s relatively weak institutional framework, ESG considerations, and operational risks, all of which contribute to a high-risk environment that affects both short- and long-term projects.

Moving forward, it will be crucial to closely monitor Argentina’s macroeconomic performance. Key indicators to watch include the trajectory of inflation, which, despite a recent slowdown, remains a critical concern. Additionally, the potential for economic recovery following a two-year recession and rising unemployment rates will play an important role.

Economic conditions will heavily influence the country’s political landscape, particularly with regard to the performance of President Milei’s party in the 2025 midterm elections. The outcome of these elections will be pivotal in determining whether Milei’s administration can secure a stronger legislative position, which would enable more decisive governance, given the current status of his party as a minority in the legislature.

Although Argentina’s mining sector benefits from specific regulations that provide a degree of stability, the broader macroeconomic conditions remain a fundamental concern for investors and companies.

Maintaining a sharp focus on these variables will be essential for those seeking to capitalise on Argentina’s mineral wealth while effectively navigating the country’s complex and evolving risk landscape.

UK investment

These efforts have already attracted significant investment, with BHP returning in July after a two-decade hiatus, committing $3 billion to develop two copper mines in partnership with Lundin. The re-entry of one of the world’s largest mining companies signals renewed optimism that Argentina’s dormant copper industry could revitalise the national economy and support the global energy transition.

As Argentina seeks large-scale investment to unlock its mining potential, the UK emerges as a strategic ally. The two countries share historic commercial ties dating back to the Industrial Revolution, when Argentine beef and grain fuelled Britain’s expanding cities. Britain was Argentina’s main trading partner until 1945, with British investment crucial in building railways and developing key industries such as banking, finance, insurance, shipping, and meat exports after Argentina's independence.

Today, a new opportunity arises to rekindle these ties amid the global race for critical minerals and the green energy transition. London serves as a crucial financial centre facilitating access to substantial international capital. The London Stock Exchange lists over 175 mining companies with a combined market value of about £210 billion, according to Baker McKenzie, and hosts major mining firms including Anglo American and Rio Tinto. This positions London as an ideal platform for attracting necessary investment to realise Argentina’s mining potential and meet global demands for critical minerals.

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