A provincial court in La Rioja, Argentina, has ordered the suspension of activities at the Vicuña mining project in San Juan, a joint venture between BHP and Lundin Mining (TSX: LUG), marking a significant setback for the companies’ operations in the region.
The ruling, issued on April 16, stems from a legal challenge over the project’s access road, which has now been shut down, effectively halting progress at the site. The Vicuña project, located in the mineral-rich San Juan province, is a key part of BHP and Lundin Mining’s strategy to expand their footprint in Argentina’s copper and gold sectors. The court’s decision introduces fresh uncertainty for the timeline and viability of the development.
Details of the legal dispute center on jurisdictional and environmental concerns raised by local authorities in La Rioja, though the project itself operates in neighboring San Juan. The closure of the access road has compounded logistical challenges, stranding equipment and personnel while the companies await resolution.
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BHP and Lundin Mining have yet to issue a public statement on the suspension or outline potential next steps. The joint venture had positioned Vicuña as a cornerstone of their regional growth plans, betting on Argentina’s untapped mineral wealth amid rising global demand for critical metals.
The Vicuña Project, held through a 50/50 joint arrangement between BHP and Lundin Mining under Vicuña Corp., encompasses the Filo del Sol and Josemaria deposits. A recently released preliminary economic assessment underscored the project’s scale, with the study outlining a base case net present value of $9.5 billion for the project on an after tax basis. That estimate is based on an initial 25 year life of mine. Lundin Mining however highlighted the venture as a cornerstone of a world-class mining district, projecting a potential 70-year mine life, producing over 22.3 million tonnes of copper and 37 million ounces of gold.
The impact of the shutdown extends beyond immediate operations, casting a shadow over investor confidence in Argentina’s mining sector. With the court order in effect, the delay could push back critical project milestones by months, depending on the speed of legal proceedings.
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