Contents

Introduction

For more than a decade, the investment climate in Argentina led many investors to dismiss the nation into the same category as Bolivia, Ecuador or even Venezuela, jurisdictions characterized by anti-neoliberalism, populism and nationalizations, and with good reason. Deteriorating macroeconomic conditions also made it increasingly difficult to do business in the country.

Since President Mauricio Macri took office at the end of 2015, reforms have taken shape to fix the economy and stimulate investment. Some projects that had been halted are starting to reawaken. New studies are underway at some large copper projects and the lithium sector is stronger than ever. Investor interest in general is high.

A number of new mines were indeed developed during the "Kirchner" years before Macri came to power, highlighting that the problem is only part national policy. In a federal country where the provinces own the minerals and each has different regulations, miners faced significant uncertainty and downright confusion. Some provinces halted mining outright.

There is hope around a new federal mining agreement and the government is on a mission to attract investment, not just in mining, but in a generalized development push. Argentina's mining chamber CAEM forecasts US$20 billion in mining investment by 2021, though it is not clear whether the projects in question are sufficiently advanced for this to occur.

"There is enthusiasm. Argentina is back on the international radar and that is important for us," says Diego Parravicini, a senior lawyer at Buenos Aires firm Beccar Varela. "Reactivation is on the horizon."

There are signs that investment is ready to grow, but what is holding back a wider reactivation? On the one hand, Macri's timing could perhaps not be better. Metal prices are finally starting to generate optimism after five dark years and though Argentina largely missed out on the commodities mega boom of the 2000s, it now is much better positioned to take part in return to capital markets. But both the new price boom and confidence in Argentina must further consolidate. While we are loath to forecast a perfect storm at this stage, the pieces are clearly falling into place for Argentine mining.

(Cover photo credit: Goldcorp, Cerro Negro outcrop)

Figure: GDP Growth in Argentina
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