Argentina's Vicuña Copper Project Unveils $7.1 Billion Initial Investment Plan

Vicuña Corp., a 50-50 joint venture between Canadian mining company Lundin Mining (TSX: LUN) and Australian mining giant BHP (ASX: BHP), has announced the results of a preliminary economic assessment (PEA) projecting an initial capital expenditure of $7.1 billion for the first phase of the Vicuña copper, gold, and silver project in Argentina. This monumental project, centered on the Josemaría deposit in Argentina's San Juan Province, is poised to become a significant milestone for the country's mining industry.

The Vicuña project encompasses a vast mining district that includes the Josemaría and Filo del Sol deposits, strategically located along the border of Argentina and Chile. The first stage of development will focus on the Josemaría deposit and involve the construction of a sulphide mill for copper concentrate production. This initial phase is designed to allow for future expansions, aiming to deliver accelerated first production and early cash flow.

The companies indicate that the total capital investment for the entire project could reach $18.1 billion across three stages. According to Vicuña Corp. CEO Ron Hochstein, the Josemaría deposit already holds permits and has completed feasibility studies, making a final investment decision (FID) for the first stage achievable by the end of 2026.

This development represents a substantial potential for copper supply in global markets. The Vicuña project is projected to produce an average of 400,000 tonnes of copper, 700,000 ounces of gold, and 22 million ounces of silver annually over its first 25 years of operation. This scale could position the project among the world's top five copper, gold, and silver mines. Given the escalating demand for copper in global electrification and renewable energy systems, large-scale projects like Vicuña are critical for long-term commodity price stability.

Argentina's President Javier Milei's government is strongly backing the mining sector through its Incentive Regime for Large Investments (RIGI), designed to attract major investments. The RIGI application for the Vicuña project is the largest submitted under this new system to date. This governmental support is crucial for Argentina to achieve its goal of becoming one of the top 10 global copper producers by 2035. The country has not had large-scale copper production since the Alumbrera mine closed in 2018, but now boasts a pipeline of projects with over $40 billion in potential copper investments.

Analysts and market expectations suggest that the Vicuña project will be a significant economic driver for Argentina. It is anticipated to create tens of thousands of new jobs and substantially boost the nation's export revenues. Lundin Mining and BHP are focused on unlocking the long-term copper, gold, and silver potential of the Vicuña district through this strategic partnership. With the completion of environmental approval processes and local agreements, construction for the first phase is expected to commence, targeting initial copper concentrate production by 2030.