The pro-investment reforms being promoted by Argentina seek to reposition the country as a destination for large-scale mining projects. Their impact will depend on the degree of institutional stability achieved and could reshape capital flows in the region, with implications for Chile.
The recent visit by President-elect José Antonio Kast to his Argentine counterpart, Javier Milei, in Buenos Aires was interpreted within Chile’s mining sector as a signal of political rapprochement between the two countries, coming at a time when Argentina is advancing far- reaching reforms to attract foreign investment.
Although it is still too early to speak of a formal reactivation of the bilateral agenda, the convergence of ideologically aligned governments and the entry into force in Argentina of the Incentive Regime for Large Investments (RIGI) opens up a new scenario, with potential effects both on competition for mining capital and on opportunities for greater mining integration—particularly in cross-border copper projects—according to analysts consulted by El Mercurio.
The RIGI aims to provide tax and foreign-exchange stability for up to 30 years, along with benefits related to VAT, tariffs, and profit remittance rules, in a sector characterized by capital- intensive investments and long payback periods. This takes into account that Argentina hosts still underdeveloped mineral resources and shares geological districts with Chile along the Andes mountain range.
“It is more reasonable not to view these reforms as a threat to Chile, but rather as a complement. If Argentina manages to stabilize its macroeconomy and sustain these conditions over time, the Chile–Argentina Andean platform becomes more competitive vis-à-vis other global mining hubs,” says Cristián Cifuentes, Senior Analyst at the Center for Copper and Mining Studies (Cesco).
Putting the House in Order
Beyond the pro-investment shift represented by the RIGI, experts agree that Argentina’s main challenge remains translating regulatory change into effective and sustained stability. The new regime is specifically targeted at large-scale mining projects, particularly copper projects, with horizons of 25 to 30 years and capital expenditures ranging from US$3 billion per project to around US$12 billion for the development of entire districts, such as those located in the province of San Juan, including Vicuña.
However, the appeal of these incentives coexists with a history of macroeconomic volatility, short electoral cycles, and a perception of country risk that continues to weigh on investment decisions—especially for long-term commitments— ccording to Víctor Delbuono, a researcher at the Argentine think tank Fundar.
“The RIGI introduces far more competitive conditions for copper, offering 30-year stability and the ability to remit profits, which was investors’ main demand. But no regime works on its own if it is not consolidated over time and if macroeconomic conditions and institutions do not support it,” he warns.
Incentives versus Confidence
In practice, mining investment decisions depend on confidence in stable rules throughout the life of a project. Chile stands out relative to Argentina due to its higher investment-grade status, a more predictable regulatory framework, and a consolidated mining industry, according to Antonia Godoy, Analyst of Regulatory Affairs and Public Policy at Plusmining.
“In mining, fiscal incentives and institutional stability are complementary. An attractive regime loses value if investors perceive that it could be modified following a change in government. In a long-term industry such as this, regulatory predictability is an essential condition for incentives to have a real and sustained effect,” she notes.
From the Chilean perspective, Argentina’s reforms translate into a reordering of investment flows, whereby part of the ‘marginal’ capital—especially in exploration and greenfield projects—could show greater interest in northern Argentina, driven by incentives and lower relative costs. However, in large-scale projects located along the border, the discussion shifts from direct competition toward productive complementarity.
According to a study conducted by Cesco and Fundar, the binational portfolio of projects in areas such as San Juan, Atacama, and Coquimbo is estimated to involve investments exceeding US$18 billion, nearly 80,000 jobs during the construction phase, and a potential increase in mining exports of 8% for Argentina and 1.8% for Chile, provided there is coordination in infrastructure, logistics, and services, according to Cifuentes.
“We are not facing a zero-sum game. Even when the mineral is extracted on the Argentine side, a significant share of the value can be generated in Chile through specialized services, logistics, ports, or even smelting, as shown by the value- hain linkages estimated for projects such as Filo del Sol, Josemaría, or Los Helados–Lunahuasi,” adds the Cesco expert.
Bottlenecks
Although there is interest in a favorable political environment, binational mining integration faces challenges such as a lack of regional infrastructure, regulatory and environmental differences, and Argentina’s complex federal system. In addition, managing cross-border impacts requires coordination on issues such as water basins, infrastructure, and community relations; without this, regulatory uncertainty increases and long-term investments are delayed.
“The challenge today is to move from formal cooperation to effective coordination between states and private-sector actors. Mining integration requires aligning regulatory, environmental, and tax criteria, as well as managing the tensions inherent in Argentina’s federal system,” says Godoy of Plusmining.
Delbuono agrees, adding that “these projects far outlast political cycles. If institutional frameworks that endure beyond successive administrations are not built—with clear rules, environmental coordination, and shared governance— integration will remain more a promise than a productive reality.”
Source: El Mercurio