Opportunities and Challenges of Mining vis à vis the energy transition | Abeledo Gottheil

Opportunities and Challenges of Mining vis à vis the energy transition


Even though historically agroindustrial activity has had a predominant role in Argentina’s exports, and it is the main sector that generates currency, the results reached in the last few years by the mining sector show that our country has a great potential in the exports sector, which, joined to the development of new technologies focused on the energy transition towards a system without carbon emissions, offer an extraordinary opportunity to maximize its exportation development.

At present metalliferous and lithium mining are the most active activities of economy, although not always occupied said predominant role. As from 1989, when the State reform was implemented structured in the launching of the currency board plan, the economic deregulation and privatizations of public entities, among others, Law 24,195 enacted in 1993, known as the “Law of Mining Investments”, that implements a special promotion regime for the development of mining activity within the Argentine territory, with the purpose of attracting foreign capitals, encourage the exploitation of mining resources and incorporate new technologies in the sector.

Hence, the so-called “Mining Investments Regime” is created, which main benefits are tax stability for 30 years for the companies developing said activity in approved projects, adding the imports duties exemption.

With the implementation of the Law the gold, silver and copper extraction mainly began to increase. In the first place the activity is developed by companies, most of them private and foreign, however, as from 2002, due to the devaluation of the Argentine peso and the drop of the production costs in our country, provincial mining companies formed joint ventures with foreign investors and began to join the activities.

The legal framework in force, coupled with the fact that there are large reserves of lithium in the region, contained in the salars located within the so-called “Triangle of lithium” composed by Argentina, Bolivia and Chile, have positioned our country within the four main producers of lithium carbonate worldwide.

Indeed, the early need to replace the use of fossil fuels by the minerals connected with said energy transition, such as lithium, has allowed the mining activity to achieve a predominant place in the generation of genuine currency having a great impact in the national economy.

According to the information offered by the Ministry of Productive Development through the System of Information Opened to the Community on the Mining Activity in Argentina (SIACAM), as at 02/14/23, the mining projects portfolio in the different provinces reaches 119 projects, at different stages of progress and on different minerals.

– Main Mineral:









– Main provinces:






Río Negro


San Juan

Santa Cruz

From the 119 projects registered by the SIACAM, 41 correspond to Gold, 38 to lithium, 20 to Copper and 10 to Silver, at different progress stages, evidencing the importance thereof.

It is highlighted that in the case of Gold 12 projects are in production and other 23 are in an advanced exploration stage, while in the case of Lithium 2 projects are already in production and other 20 are in advanced exploration1 , what confirm the projection of Lithium in the sector.

To allow the development and promotion of mining, the maintenance and the implementation of proper government policies is crucial, both at a national and provincial level.

Benefits of the Mining Investments Law

As we mentioned above, the Mining Investments Regime is essential, and proves to be crucial, for the permanent development of the sector. Among the benefits thereof, the following stand out:

– Fiscal stability for the term of 30 years for the companies developing said activity in approved projects, as from the presentation of the economic feasibility of the project.

This means that its total tax burden cannot be increased, in percentage terms, as from the presentation of the feasibility study, as a consequence of the creation of new taxes, increases of rates, duties, fees, amounts or modification in the tax base

– Deduction of 100% of the Income Tax of investment expenses regarding prospection and exploration

– VAT reimbursement for the purchase of goods or services in exploration

– Accelerated amortization regime

– Special provision for the environment protection, deductible up to 5% of the operating and cost-benefit

– Payment exemption of import duties of capital goods and supplies, a benefit granted both to the mining companies and to the enterprises that provide mining services.

In turn, the activities comprised by the Mining Investments Regime are the following:

– Prospection, exploration, development, preparation, extraction of mining substances comprised in the Mining Code.

– Grinding, milling, pelletization, sintering, briquetting, primary processing, roasting, smelting, refining, sawing, carving, polishing, shining.

– Mining services.

Investments Promotion Regime for Exports (Decree 234/2021)

At this point it must be highlighted that in year 2021 the National Executive Branch implemented an “Investments Promotion Regime for Exports”2, that comprises investments intended for the start-up of new productive projects and the extension of already existing business units implying the completion of a direct investment in foreign currency of not less of U$S 100,000,000.

This Promotion Regime provides for the free application benefit of up to 60% of currency obtained in the exports related to the project (depending on the investments to be made) in order to be used for the payment of capital and interest of trade or financial liabilities abroad and/or profits and dividends corresponding to closed and audited balance sheets and/or repatriation of direct investments of non-residents, and likewise they will enjoy exchange regulatory stability.

As regards lithium, within the framework of this Regime, the Ministry of Economy has approved 3 investment projects intended for the extraction of lithium, presented by mining companies located in the provinces of Salta, Catamarca and Jujuy.

In addition to these companies, the number of projects that are carried out at different stages, envision that Argentina will take on more and more importance as lithium supplier vis à vis the growing demand of the mineral by the international market.

As regards currency, a thorough dynamism is expected, reaching AR$ 19,174 million mining exports for 2030, an amount that almost increases six-fold the figures of 2021. Hence, mining would contribute 17% of the increase of exports expected for 2030 and which is one of the possibility conditions for the general economic and social improvements provided for in the Plan “Productive Argentina 2030”. 3

Opportunities ahead

The favorable conditions for the mining sector expect a great growth potential for the sector in the future. Its growth is essential to contribute to the generation of genuine investments and currency.

In spite of the exponential increase in the mining activity, 26 years had to go through since the enactment of the Law, when, just by year 2019, firstly, the conditions for the use of the exemption benefits as regards the payment of import duties were regulated, setting in addition the list of goods subject to be imported with tax exemptions, and in the same sense the administrative proceeding was set, whereby the beneficiaries of the “tax stability” set forth in section 8 of the Law, which tax burden would have been impaired, could apply for the reimbursement of the sums paid in excess, as a result of said impairment.

These progresses proved to be good news for the sector, because the list of goods protected by tax exemptions was enlarged4, and the modernization and speeding-up of proceedings through the Platform for Remote Proceedings (TAD) was consolidated with the consequent benefit in the reduction of time and costs for the sector.

In this same sense, after fixing a proceeding to recover said tax burden paid in excess before the Mining Secretariat, an alternative way vis à vis to resort to the courts in order to claim the maintenance of the “Tax Stability” was envisioned.

However, during 2020, the Mining Secretariat modified the course maintained when it provided for a “Strategic Plan for the Argentine Mining Development” and the creation of a “Technical Board of Analysis”5, with the purpose of encouraging alternative ways for the supply of national products for the demand of goods by the mining projects.

Hence, a process for the progressive review of the elimination of goods having the benefit of import duties exemption, setting short, medium and long-term results to be complied with, on the basis of data obtained at technical meetings to be regularly held with companies, Associations of mining suppliers and representatives of the sector projects.

It is clear that the promotional regime of the Mining Investments Law consists in a commitment undertaken by the Government not to increase the tax burden of mining undertakings comprised within the regime, however, the eventual elimination of any of the tariff items with tax benefits could limit the extents of the tax stability guarantee granted to each undertaking and cause the violation thereof, giving rise to new conflicts to be resolved.

As regards this item, it should be recalled that the Mining Investments Law sets forth that the beneficiaries of tax stability claiming that said stability has been violated, shall justify and prove in each case —with necessary and sufficient means— that in fact an increase of the tax burden occurred with the extents emerging from the provisions of the Law6.

Hence, each beneficiary should adopt the measures tending to intensify control and safeguard all the documentation that may support an eventual claim for the violation of the tax stability held.

The foregoing, notwithstanding the granting of the benefits, implies the performance of obligations inherent to the capacity of the parties registered as beneficiaries of the Regime, such as the presentation of the documentation and affidavits on the use of the benefits, the obligatoriness of providing to the imported goods exemptions exclusively to mining works and comply with the requirements from the enforcement authority, among others.

In fact, the mining companies must comply with different conditions to maintain their nature as beneficiary of the regime and continue using the benefits granted. It is not a simple task, it requires an additional commitment of their activity.

These mining companies must be considered as strategic partners to take advantage of the current situation in favor of the national economic development. Argentina has 9% roughly of the total worldwide stock of lithium7, positioning it in a privileged place to be able to supply the increase of demand.

In addition to the above, the mining industry favors the generation of genuine private employment, mainly at inhospitable areas where the salars are located, discouraging the uprooting on the basis of professional training and education of profiles required by the sector, and the improvement of the local community working conditions.


To achieve these goals requires to continue with the strengthening of stability and predictability of the regulatory framework, that allow to boost the full development of the mining projects in a sustainable way, and, especially, stable policies and clear rules, avoiding uncertainties that make it hard for the mining investors to complete their projections over the long run.

International cooperation will be crucial also to attract investments, as it was identified in the Memorandum of Understanding executed on June 13, 2023 between the European Union and Argentina, to set a strategic association on sustainable chains of value of raw materials that support the transition to clean energy and the digital transition (among which lithium, copper, cobalt, nickel, vanadium, boron, titanium metal, rare earth elements, among other minerals are included)8.

Within this context of unique opportunity to take advantage of the mining productive potential, it is necessary to guarantee the conditions for the arrival and sustainability of investments, particularly predictability within the framework of the exchange and tax policy, and essentially, the effective compliance with the Mining Investments Law.

In fact, the increase of lithium demand has no turning back, it is a strategic resource for the energy development and transition generated by the acceleration of global warming. However, to have one of the major lithium worldwide reserves and other key minerals is not enough to achieve the growth so necessary for the Nation.

It will be essential then to be able to guarantee access to the foreign exchange market to sustain the mining investment over the long run, facilitate to the sector the importation of capital goods and payment of services abroad, as well as to exempt said payments from the “Impuesto PAIS” (tax on the purchase of foreign currency for the promotion and finance of social inclusion), allowing in turn the development of a chain of value in the mining industry.

* by Julio A. Vieito, Federico Osvaldo Valiño and Ana V. Pampin, from Abeledo Gottheil Abogados.

To know more on our experience in Mining, please log in https://abeledogottheil.com.ar/area/mineria/

  1. Source SIACAM. ↩︎
  2. Decree N° 234/2021 ↩︎
  3. Mission 8. Mining – Productive Argentina 2030 ↩︎
  4. Resolutions Nº 89/2019 and Nº 25/2020 Mining Secretariat ↩︎
  5. Resolution Nº 138/2020 Mining Secretariat ↩︎
  6. Section 8 – Law 24,196 ↩︎
  7. “Special Report on Lithium” Mining Secretariat of the Nation, October 2021 ↩︎
  8. See our article “The European Union and Argentina executed a Memorandum of Understanding to set forth a strategic association on sustainable chains of value of raw materials “, dated 06/23/2023, in https://abeledogottheil.com.ar/mineria-la-union-europea-y-la-argentina-suscribieron-un-memorandum-de-entendimiento-para-establecer-una-asociacion-estrategica-sobre-cadenas-de-valor-sostenibles-de-materias-primas/ ↩︎

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