Argentina's RIGI Provides Incentives to Mining Cos.
Research Report

Argentina's Incentive Regime for Large Investments (RIGI), enacted under President Javier Milei and effective as of July 8, 2024, is "the most relevant initiative thus far as far as mining investors should be concerned," reported Hallgarten & Co. Analyst Christopher Ecclestone in his Sept. 29 country coverage.

RIGI is "a cornerstone of the Milei Administration's policy offering, and its introduction has been viewed very well outside Argentina," Ecclestone wrote. Milei began his term in mid-December 2023.

The Historical Problem

The analyst pointed out that Argentina's average tax burden for miners has been more than 50%, according to Cámara Argentina de Empresas Mineras, the country's mining industry group. Miners in Argentina have been unhappy with Argentina's unfavorable exchange rates, capital controls, import and export taxes, and difficulty importing goods and equipment.

"The fly in the ointment has long been foreign exchange issues and the import rules for capital equipment, which have caused miners and explorers and developers untold long-running headaches," the analyst added.

Incentivizing Foreign Investment

RIGI, or Régimen de Incentivo para Grandes Inversiones, addresses these complaints, noted Ecclestone. The program provides federal tax, customs and exchange incentives to companies developing a project worth $200 million ($200M) or more, in these sectors: mining, oil and gas, energy, technology, agribusiness, infrastructure and forestry.

This is a shift in the way mining law in Argentina has been handled, at least since 1990, noted Ecclestone. Between then and the launch of RIGI, largely it has been left to each province, with little or no federal involvement.

Certain local trade groups and unions criticize RIGI for disadvantaging smaller companies and local suppliers, Ecclestone noted.

"We would tend to agree with them," he wrote. "However the $200M bar is set at a good level, as few of the projects outside of mining or oil and gas can get above that threshold."