U.S. Eyes Argentina's Vaca Muerta, Mineral Resources

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

Washington seeks to expand investments and economic participation in Argentina's growing energy and mineral sectors by enabling investment opportunities that support commodity exports from the South American country.

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New Cooperation

The United States is strengthening cooperation with the Argentine government through the launch of the Andes-Atlantic Corridor, which seeks to expand the movement and export of Argentina's commodity production.

This strategy aims to ease transportation and export bottlenecks for Argentina's growing production of natural gas, oil, lithium and other minerals by investing in rail networks, pipelines, ports, power and digital infrastructure that connect the country's resource-rich areas with the Atlantic ports and Western markets.

The initiative would allow U.S. companies to participate in these investments while supporting the increase of Argentina's commodity exports to Western markets and strengthening U.S.-linked energy and critical-minerals supply chains.

This initiative also offers a long-term strategic vision for Argentina's emerging sectors, such as copper mining, where billions of dollars in new developments have been announced that will require robust transportation, power and export infrastructure to connect with international markets.

This "is the first Partnership for Global Infrastructure and Investment Corridor in the Western Hemisphere, deepening U.S.-Argentine economic integration and connecting investors to opportunities across Argentina's energy, mining, infrastructure, and technology sectors," said the State Department in its statement.

EXIM Support

More importantly, the initiative seeks to mobilize U.S. financing agencies, such as the Export-Import Bank of the United States (EXIM) and the U.S. International Development Finance Corporation (DFC), to help finance key Andes-Atlantic Corridor projects alongside the private sector.

This financing strategy has already generated a preliminary financing proposal. As part of the corridor initiative, EXIM issued a non-binding term sheet for up to US$6 billion to support Argentina LNG, an integrated US$51 billion project led by YPF to export Vaca Muerta's growing production through a 12 million-tonne-per-annum (MTPA) liquefied natural gas (LNG) export terminal, with the capacity to expand it to 18 MTPA. The proposed financing would support the procurement of U.S. goods and services for the project's infrastructure and production activities.

Other projects include the rehabilitation of the Belgrano, San Martin, and Urquiza freight rail lines for which Industrial Info Resources is tracking 135 rail projects across the three lines, representing just over US$ 1 billion in investments.

Separately, EXIM also signed a framework to mobilize up to US$7 billion through 2027 for critical minerals, energy security, grid modernization, digital connectivity and other sectors.

"EXIM is moving boldly into the industries of the future. To do this, we must secure our supply chains, support American jobs, and ensure American workers, products, and expertise reach all parts of the Western Hemisphere," said EXIM Chairman John Jovanovic.

The U.S. financing push comes as Argentina also has sought to improve the investment environment with the announcement of the Incentive Regime for Large Investment (RIGI) in 2024, which grants fiscal, customs, foreign exchange and legal benefits to qualifying projects with with a minimum investment threshold of US$200 million.

Over a dozen projects in sectors such as mining, oil and gas, energy transport, renewables, and ports have been approved under the regime.

Argentina has a vast pipeline investment projects in energy and minerals production that will require additional transport capacity to reach export markets. To put things in perspective, Industrial Info Resources data show 331 metals and mineral projects in Argentina, representing investments of US$75.93 billion. Out of those, 85 projects are focused on lithium mining, amounting to investments of US$26.19 billion.

Meanwhile, another 54 projects pertain to copper mining, signaling investments of US$38.58 billion. Argentina does not currently have any large-scale copper operations, however, forecasts suggest that by 2035 the country could produce around 1.5 million tonnes of copper based on its current project pipeline.

On the energy front, Industrial Info Resources data find more than 500 oil and gas production projects in Argentina, totalling investments of US$21.82 billion. For oil and gas pipelines and terminals, another 240 projects worth US$9.69 billion in investments are being tracked by IIR.

Argentina's planned commodity production expansion will require growing transport capacity. At the same time, the U.S. seeks to secure critical minerals and energy, expand investment opportunities and deepen its ties with countries in the Western Hemisphere.

Key Takeaways

• The U.S. and Argentina announce efforts to expand transport capacity to support Argentina's energy and mineral development.
• EXIM issued a non-binding term sheet for up to US$6 billion to support Argentina LNG.
• EXIM also signed a framework to mobilize up to US$7 billion through 2027 for critical minerals, energy security, grid modernization and digital connectivity.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).