Will the US-Argentina Mining Deal Secure Supply Chains?

Argentina's comprehensive trade and investment agreement with the US, designed to isolate critical mineral supply chains from non-market influences, is set to strengthen its position as a key strategic partner.

The alliance, established under a broader strategy to create a Western trade bloc, makers Argentina a central partner in the Trump administration's "supply-chain sovereignty" initiative.

By aligning the Argentine mining sector with American industrial demand, the two nations could unlock US$ billions in financing for the extraction and processing of materials essential to the global energy transition and national defence.

Strategic partnership for mineral security

In early 2025, Argentina became a strategic ally of the US as part of President Trump's Government strategy to form a trade bloc and secure critical mineral supply chains, opening up investment opportunities and potentially facilitating the infrastructure requirements of the industry in the South American country.

The agreement specifically targets copper, lithium and uranium, all of which are now on the US critical minerals list. To support this, the Trump administration committed in March 2025 more than US$30bn to boost mining projects.

Additionally, the administration is considering a new bill that seeks to expand Export-Import Bank of the United States (EximBank) funding. This legislation would enable an additional US$70bn for investments in the sector.

The partnership establishes a framework for long-term collaboration between both nations. This includes technical cooperation, regulatory alignment and shared research initiatives focused on sustainable mining practices.

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• Procurement & Supply Chain LIVE: The Net Zero Summit - QEII Centre, London, March 4-5
   
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Co-located with Sustainability LIVE, these events brings together CPOs, CSCO, CSOs, ESG leaders and senior decision-makers at a moment when sustainability, supply chains and commercial performance are increasingly interconnected.

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Investment incentives and economic instruments

To ensure these benefits materialise, Javier Milei's government has committed to prioritising US applications under the Large Investment Incentive Regime (RIGI). This move is intended to accelerate the deployment of American capital across the value chain.

According to Argentine government officials, this shift could modernise Argentine infrastructure. It would provide the logistics and operational capacity required for high-volume exports.

The agreement presents regulatory challenges for Argentina. China's presence in the sector remains significant, putting pressure on attempts to consolidate greater collaboration between the two countries.

The framework includes subsidies, guarantees, loans and investments that will seek to drive new mining and processing projects. These economic instruments are designed to create competitive advantages for US-aligned operations.

Addressing Chinese market dominance

As of early 2025, China remains the dominant force in Argentine lithium, with Ganfeng Lithium and Zijin Mining controlling operations across the salt flats of Jujuy, Salta and Catamarca.

According to current holdings, Ganfeng maintains interests in Cauchari-Olaroz and the Pozuelos Pastos Grandes project, while Zijin is actively producing lithium carbonate at Tres Quebradas.

The US-Argentina alliance seeks to create a reliable supplier alternative. The framework includes measures to streamline permitting and establish markets with minimum prices, aiming to protect trade against volatility and unfair commercial practices, establishing Argentina as a key partner for the United States amid high global demand.

According to Argentine Ministry of Economy projections, the economic impact of these reforms is already visible. In the first quarter of 2025, mining exports reached a record US$6.037bn, reflecting year-over-year growth of nearly 30%, with gold and lithium serving as the primary drivers.

Looking ahead, the Argentine government projects that total exports could reach $US100bn within seven years.Mining is expected to contribute more than $US20bn and potentially exceed $US$30bn by the end of the next decade.

This development could represent a significant shift in global supply chain dynamics, particularly for organisations managing procurement strategies for critical minerals.

The agreement establishes new sourcing pathways that could reduce dependency on Asian markets while potentially creating more diversified and resilient supply networks for industries reliant on these materials.