Two mining giants have partnered to buy the San Juan copper project for US$3 billion.

Copper strip Edge of the Sun (FDS), located on the border of San Juan Province and the Atacama Region, Chile; will be in the hands of mining groups bottomhole pressure And Lundin Miningafter they acquired Filo Corp. They will also share the Josemaría project.

Filo Corp, listed on the Toronto Stock Exchange (TSX) and holding 100% of the project, was acquired in its entirety for C$4.1 billion (about US$2.95 billion) by the two mining companies, which they are forming a joint venture.

In this regard, BHP will acquire 50% of the Josemaria project, a copper, gold and silver deposit also located in San Juan and owned by Lundin Mining, for US$690 million, subject to certain purchase price adjustments. “Under the joint venture, the projects will be developed in accordance with international industry standards to ensure economic and social value,” the companies said in a statement.

Mike HenryBHP CEO, said: “The proposed transaction builds on the long-standing relationship between BHP and the Lundin group of companies, through which we have developed a clear understanding of the resource potential of the Vicuña area and the potential development paths of the Filo del Sol and Josemaria projects. “This transaction is consistent with BHP’s strategy of acquiring attractive early stage copper projects and forming strategic partnerships with parties where complementary skills and experience can deliver long-term economic and social value.”

“The joint venture with Lundin Mining will contribute to the development of the Vicuña region, which has the potential to be an important contributor to Argentina’s economy for decades to come. At the same time, by partnering with Lundin Mining, BHP continues to invest in the growth of Canada’s sustainable mining sector,” he added.

The consolidation of the FDS and Josemaria projects “facilitates the possibility of development at the scale of the area: the proximity of the FDS and Josemaria projects allows for the sharing of infrastructure between the projects, with greater economies of scale and greater possibility of phased expansion, as well as the inclusion of future research as the area develops,” they noted.

And they added that it “takes advantage of the advanced design and permitting stage of the Josemaria project to advance the combined FDS and Josemaria projects within a phased development schedule that takes into account the improving investment conditions in Argentina and copper needs in the context of the global energy transition.”

In this context, the presidential press secretary Manuel Adornisaid at his usual conference: “BHP has announced a million dollar investment with Lundin-Mining to develop two projects in the province of San Juan, following the approval of the Basic Law and therefore the RIGI or Regime for Major Investments. It should be clarified that this company would not have made the investment or the decision to invest in the long term if it were not for this regime, which gives it certain guarantees and, of course, increases the value of the project.”

“The complex will be among the top 10 copper mines in the world and will provide San Juan with $1.1 billion in annual exports when it is fully producing copper. “This is a very important job for a country that has not created jobs for 13 years, where its GDP has not grown for 10 years, has 8 million people in the informal sector, and is the second country with the most ICSID cases,” the official said.

“Mining is a huge export industry, which in countries like Australia exports $300 billion a year, in Chile $52 billion a year, but here in Argentina, with the same mountain range as Chile, it barely brings in $4 billion a year. And from now on, of course, that will change. In President Miley’s Argentina, private companies have a structure that accompanies their initiative, rather than strangling them with the weight of the state. “Let the Australian and Chilean mining industries be prepared, because with the new Argentine mining industry they will have competition,” he concluded.

As for what this operation represents for Argentina, the Argentine Chamber of Mines (CAEM) assured: Information: “BHP is one of the most important companies in the world, and its arrival as an investor in projects in Argentina is very beneficial for the sector. We are confident that the joint work of BHP and Lundin will give new momentum to the copper projects of Josemaria and Filo del Sol and will have a positive impact on other projects in the region.”

“Copper is one of the minerals for which international demand will grow due to the development of electric mobility and clean energy. Argentina has important resources of this mineral, but currently has no copper mining projects,” he added.

“To put the copper potential in context, given the same mountain range (which allows us to assume similar resources), Chile has more than 60 copper mining projects that produce a value similar to all of Argentina’s agricultural exports. In addition, the copper project under construction creates about 4,000 jobs and an investment that could reach US$5 billion,” he concluded.

Mario Capelloa former national deputy and former deputy minister of mining development in the country, said the deal was very good news because “BHP is number one in the world and is linked to the phenomenon of copper, a critical mineral that is fundamental to the energy transition,” which will be in short supply between 2026 and 2027. Companies are starting to invest to meet global demand. “Argentina can become an important player in the global copper supply market.”

“Today, the consumption of fine copper is about 22 million tons and this figure is expected to double by 2040. At the same time, it will be necessary to open one mine per year with a capacity of 300 thousand tons of pure copper to approach this requirement,” he said.

“Josemaría already has an environmental impact statement, but Filo del Sol is at an advanced stage of exploration. It is estimated that the former can reach the production of 150,000 tons of pure copper per year, while Filo del Sol has greater potential,” the specialist noted.

“According to Wood Mackenzie, the price of a ton of copper is currently $8,950, but it is estimated that it could reach $12,000 in the coming years. So, Josemaría alone could provide exports worth $1.342 million at the current price,” Capello said.

In its turn, Daniel Dreitzen, Aleph Energy CEO assured: “The truth is that this is very good news: there are companies that are buying explored, but not even producing, copper and gold deposits for $2.9 billion. This is very good because if someone pays, it means that they will have the money later to develop the project faster and bigger than a company like BHP, which is a global giant.”

On the other hand, CAEM issued a statement asking for more provinces to join RIGI. “We understand that the progress made in terms of provinces joining the Major Investment Incentive Regime (RIGI) is important, as it is a tool that will help make important investments aimed at developing the Argentine mining industry, which will have a major impact on the Argentine economy, creating real jobs, promoting local suppliers, significantly improving infrastructure, contributing foreign exchange and developing a population that is eager and enthusiastic about the development of this industry,” they said from CAEM.

“It is essential to improve competitiveness vis-à-vis other countries that have similar mineral resources and that have been able to significantly develop their production thanks to predictability in exchange matters, legal certainty, a competitive tax system and appropriate infrastructure,” they said.

In numbers, “the construction of mining projects takes between 3 and 5 years, depending on their size, and industrial production is at least 30 years. A single mining project can employ around 800 SMEs during its construction, maintaining productivity and around 600 permanently. The vast majority of these SMEs are Argentine suppliers, whose workforce is also Argentine. Employment projections indicate that each of these projects will employ between 3,000 and 5,000 people. We can understand the impact this has on the provinces where the mining takes place and the positive effect that extends throughout the country,” they said.

“In the current environment, RIGI is helping to create conditions conducive to the launch of copper mines, large-scale projects that have been in the works for years and that will be transformative for the region. Including lithium, to take advantage of the window of opportunity offered by electric mobility. “There is also a need to incentivise exploration investment to develop new gold and silver projects and expand existing ones, which produce the country’s main mining commodity but are in decline due to a lack of incentives to extend their useful lives,” they added.

“We at CAEM believe that we must take every possible opportunity to value mineral resources. So the more than $25 billion we have in our portfolio are deposits in development. Triple current exports to $12 billion a year and double the more than 100,000 jobs we are currently creating, opening up new opportunities for more Argentines,” they concluded.