There is “significant potential” for the growth of the energy and mining sector in Argentina, according to the International Monetary Fund (IMF) in his latest report on the country. Crude oil exports could reach an additional $14 billion in 2030 and external sales of minerals could multiply by five.
Initial steps have been taken to boost investment and exports in the strategic energy and mining sectors.
Regarding the energy sectorthe alignment of retail fuel prices with international prices, the proposal to eliminate the domestic oil price ceiling, along with market-based pricing of electricity and natural gas utilities, will support investment in shale gas and oil reserves, subsequently boosting energy exports.
Legislation has also been submitted to Congress to strengthen regulations and improve incentives for long-term investment in energy and miningincluding green metals.
There is significant potential for further strengthening of the energy balance driven by export growth, especially to neighboring countries.
According to independent evaluations, Crude oil exports could rise steadily from around 100 kbbl/d in 2023 to 900 kbbl/d in 2030, generating an additional $14 billion in annual exports.
The potential export of LNG also offers significant advantages, although this would also require significant investment in infrastructure to build liquefaction terminals. However, These ambitious figures continue to be conditional on an adequate macroeconomic and regulatory framework that helps cover an investment deficit estimated at 40 billion dollars in the medium term.
Similarly, The mining sector could generate an almost five-fold increase in its exports in the medium term.
Three quarters of the potential increase could come from lithium exports ($12 billion), and the rest would come primarily from copper exports ($5 billion), production of which is expected to begin in 2027.along with smaller amounts of gold and silver exports.
Achieve this potential will require the delivery and execution of significant investments: $17 billion in mining investments have been announced so far, with 6 projects already under construction and more than 70 in advanced stages, according to the Ministry of Mining.
This dynamic is reflected in the program basis for medium-term FDI inflows. However, the impact on the trade balance remains uncertain, given the high import component expected in the early stages of mining projects.
The realization of these investments will depend on ensuring macroeconomic stability, but also, crucially, on planned reforms to improve the predictability of the investment regime.
Source: Ambito
