Milei seeks to accelerate Argentina’s copper boom by easing glacier rules

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.

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 US$9.5 billion El Pachón, are still struggling to get off the ground, partly because of a federal law that protects glacial formations.

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.

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. 

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 December 10. And business leaders are already expecting him to swiftly submit tax and labour reforms for which they have long lobbied.

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.

“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.”

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

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.

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.

“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. 

El Pachón has tried to get a rock glacier declassified in order to advance. San Juan Province agreed in 2023 to erase it from a provincial list, but Glencore is still trying to get it struck off the federal inventory.

Last decade, when El Pachón was owned by a company Glencore later acquired, the project became the subject of an international complaint by a local NGO over its alleged impacts on the glacial network. That case closed without any binding decision.

El Pachón isn’t alone in grappling with the presence of rock glaciers. Barrick Gold Corp ditched a gold and silver project straddling the Chile border a few years ago, in part because of a feud over how it was impacting ice masses.

The land around McEwen Copper Inc’s Los Azules project in San Juan features 150-plus rock glaciers, including one by a marsh that will limit its planned open pit. They could also complicate plans to expand, according to a preliminary assessment. “A longer-term opportunity may exist to reclassify areas where no evidence of glacial activity is found,” the report said.

Under Milei, environmental issues in Argentina have been re-framed as part of his government’s focus on turning around a crisis-prone economy in large part by tapping the country’s trove of natural resources.

In September, the Vicuña venture said it’s relying on San Juan Province to navigate the federal glacier legislation in order to grant strong permits for its multi-billion-dollar copper project.

“We believe we have very limited exposure and threats,” Jose Luis Morea, Vicuña’s senior country manager for Argentina and Chile, said at the time, when asked about his project’s compliance with existing glacier rules. “We are in a stronger position than maybe other projects.”