Milei Seeks to Accelerate Argentina’s Copper Boom by Easing Glacier Rules

Javier Milei notched a decisive victory in Argentina's midterm congressional elections last month. Photo by Eva Marie Uzcategui /Photographer: Eva Marie Uzcategu

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(Bloomberg) — Argentine President Javier Milei is planning to modify regulations that protect Andean glaciers in order to unlock tens of billions of dollars of mining investments, according to a person familiar with the matter.

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The libertarian leader has already given miners trying to unearth copper and lithium riches the option to bulletproof their investments under the so-called RIGI package of tax, customs and exchange benefits. But several projects, including Glencore Plc’s $9.5 billion El Pachon, are still struggling to get off the ground, partly because of a federal law that protects glacial formations.

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Now Milei plans to send changes that would essentially dilute those protections to Congress for approval, said the person, who couldn’t be named discussing behind-the-scenes deliberations. Another option for Milei — who has a renewed mandate to advance his deregulation agenda after a resounding win in midterms last month — would be to make changes via decree. But the congressional path would give companies an extra safeguard.

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If the president can clear projects of glacial restrictions, companies will be much more likely to proceed with investments that will turn Argentina into a major copper supplier. The world needs more and more of the metal as it’s key for everything from electrification to plumbing. 

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After boosting his representation in Congress in the midterms, Milei will be in a much stronger position to gather a voting majority in both houses once new lawmakers take office on Dec. 10. And business leaders are already expecting him to swiftly submit tax and labor reforms for which they have long lobbied.

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It’s not the first time Argentine leaders have sought to modify the 2010 glacier law. Mauricio Macri considered it as part of his efforts to lure investments into Argentina during his 2015-2019 presidency. Milei included changes in the first drafts of his signature reform legislation, though the articles were removed from the final approved version.

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“Without RIGI, these projects wouldn’t have been possible,” Juan Donicelli, a senior Argentine executive for Glencore, told a conference in Buenos Aires on Thursday. “The macroeconomic conditions are there. Now there are pending issues that the national and provincial authorities are well aware of.”

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The challenges for mining projects — including El Pachon and Vicuña, a joint venture between Australia’s BHP Group and Canada’s Lundin Mining Corp. — center around rock glaciers and ice shelves that can contribute to river basins and freshwater supplies.

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A federal government inventory, published in 2018 to help protect glacial landscapes, listed 16,000 different ice forms in the Argentine Andes, many in mining hotbed San Juan province.

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In the current rules, the legal definition of rock glaciers, which often contain ice, is loose. The mining industry generally sees the 2018 inventory as too broad, arguing that some formations shouldn’t be considered glacial at all.

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“The industry, through the Argentine Chamber of Mines, has stated that the Glaciers Protection Act requires certain clarifications as a periglacial area can have an impact on the development of most of the major copper projects in the country,” a Glencore spokesperson said by email on Thursday.