Chile and Argentina Approve Operating Agreements for Three Cross-Border Mining Projects

en.Wedoany.com Reported - On August 27, Chile and Argentina approved the Specific Additional Agreements (PAE) for three cross-border mining projects—Vicuña, NexoAndino, and Filo Sur—at a meeting of the Binational Commission on the Mining Integration and Complementarity Treaty. All three projects are located along the Andes mountain range at the border between Chile's Atacama Region and Argentina's San Juan Province. The agreements will respectively define the cross-border integrated operating conditions for each project.

The Vicuña scope covered by this PAE includes Josemaría in Argentina, Tamberías in Chile, and Filo del Sol, which spans both countries; NexoAndino comprises Chile's Los Helados and Argentina's Lunahuasi. Filo Sur is already conducting exploration in both countries, and the new agreement will allow it to organize related operations under a unified cross-border operating framework.

Vicuña is owned 50% each by BHP and Lundin Mining, with its core development assets being Josemaría and Filo del Sol. The preliminary economic assessment completed by Lundin Mining in February this year divides the project into three development phases: Phase 1 develops the Josemaría open-pit mine and builds a sulfide ore processing plant, with initial capital expenditure estimated at US$7.1 billion; Phase 2 develops the leachable oxide ore at Filo del Sol and builds SX/EW facilities, with capital expenditure of approximately US$3.9 billion; Phase 3 develops the sulfide ore at Filo del Sol and expands the processing system, with capital expenditure of approximately US$7.1 billion. The combined capital expenditure estimate for the three phases totals approximately US$18.1 billion.

In June this year, Vicuña obtained eligibility under Argentina's Large Investment Incentive Scheme (RIGI) for long-term strategic export projects, with both Josemaría and Filo del Sol included in the arrangement. The project is currently advancing detailed engineering design for Phase 1, equipment procurement, the northern access road, construction preparation, and financing arrangements. BHP and Lundin Mining plan to advance the Phase 1 investment decision by the end of 2026. Lundin Mining has allocated US$395 million in capital expenditure for Vicuña in 2026, calculated on the basis of its 50% interest.

What was approved this time are the cross-border operating agreements for the three projects. Under the PAE arrangements, the relevant projects can coordinate the cross-border movement of personnel, equipment, and materials within the scope of the agreements; each mine's development will continue to proceed according to its own engineering, permitting, and investment schedule. The Chile-Argentina Mining Integration and Complementarity Treaty, signed in 1997, established a cross-border development mechanism for mining projects along the two countries' border. After the two countries reactivated the relevant binational commission this year, specific project agreements have been progressively advanced.

Chile has announced that the current portfolio of projects related to this round of mining development exceeds US$20.7 billion, with these projects to be progressively advanced over the coming years. During the same period, seven projects in Argentina have received RIGI approval, involving investments of approximately US$22 billion; since March 11 this year, mining projects entering the environmental review process in Chile represent an investment scale exceeding US$24.3 billion.