From Bad Reputation to Financial Asset: The Price of Trust in Mining
For years, talking about mining in Mendoza meant talking, first and foremost, about conflict. The discussion became trapped between difficult-to-reconcile positions and the activity became associated, for a large part of society, with an uncomfortable word.
The scenario began to change when the province started to build a different framework for addressing its resources: technical information, environmental controls, citizen participation, infrastructure, rules for resource access, and mechanisms to bring early-stage projects to private capital.
The case of El Seguro, in MalargĂĽe, allows us to look at this process from a perspective that still occupies little space in public discussion: the financial perspective.
The award of the project to Cerro Quebrado S.A., linked to BHP, was carried out through a public tender for an exploration agreement with purchase option. This is not a purchase of the deposit nor a decision to extract. The contract must still go through its negotiation stage and, above all, exploration will need to provide the information necessary to determine whether an economically viable project exists. But in 2019 it would have been practically unthinkable, because mining was a bad word and there was no consensus to develop it.
El Seguro, the mining project that will be explored by BHP, with purchase option. (Illustrative image).
Risk is not the same as uncertainty
In finance, risk and uncertainty are not exactly the same thing.
Risk can be estimated, modeled and eventually incorporated into an investment decision. Uncertainty appears when the probability of a particular outcome is still not sufficiently known.
In an early-stage mining project, geological uncertainty is enormous. It is not enough to know that copper potential exists. You need to understand the magnitude, quality, and continuity of the resource, extraction conditions, necessary infrastructure, costs, permits, environmental and social conditions, and finally, whether all of this can become an economically profitable project.
The greater the uncertainty, the greater the return requirement an investor can demand to commit their capital. In financial terms, that uncertainty ends up impacting the discount rate and, therefore, the value assigned today to the cash flows that a project could eventually generate.
That is why reducing uncertainty also means creating value.
And that is where the importance of El Seguro appears.
Participatory monitoring at El Seguro, organized by Impulsa at the beginning of the year.
What Mendoza can control
Mendoza cannot set the international price of copper. Nor can it guarantee that beneath a certain surface area there exists an economically exploitable deposit.
But it can work on variables that are within its control: information, rules, infrastructure, environmental processes, access to territory, institutional transparency, and mechanisms that allow capital to evaluate a project with greater quantity and quality of information.
At El Seguro there was a prior process to the arrival of private capital.
Impulsa, the provincial mining company, worked on the asset, developed studies and surveys, advanced geological and technical information, made progress on environmental assessment and access and infrastructure conditions, and finally brought the project to a public tender to find a private operator.
It is not an administrative detail.
It is a way to reduce barriers to entry.
The logic is similar to that of any asset seeking to attract investment: the better prepared it is, the more information exists, and the lower the uncertainty that the person putting the money must assume.
Participatory processes, such as public hearings, generate transparency, access to projects, and reduce risk for investors.
Exploration is also buying information
Mining exploration is usually explained as the search for minerals. From a financial perspective, it can also be understood in another way: exploring is buying information to decide better where to put the next dollar.
That is why it is relevant that the agreement for El Seguro includes a purchase option.
The option allows the investor to advance in stages while obtaining information. First, they commit resources to explore. Then, based on the results, they can evaluate whether it makes sense to continue, expand the investment, or exercise the option.
It is not a guarantee of success. It is, precisely, a mechanism to manage uncertainty.
The arrival of a global actor like BHP should be read within that logic.
BHP is one of the world's leading copper producers and in 2025 completed with Lundin Mining the formation of Vicuña, a 50/50 partnership to develop Filo del Sol and Josemaria, in Argentina and Chile. The company has been signaling copper as one of its growth axes.
These are different assets. What can be observed is that Mendoza appears within the exploration map of a group that is allocating capital and technical capabilities to expand its copper exposure.
That is a very powerful signal.
The asset is prepared before arriving at capital
There is another issue that deserves attention.
Before a private party decided to participate in the tender, there was public work to make the asset more legible.
In mining, the State does not necessarily have to develop a project until it becomes a mine. It can have another role: generate information, organize processes, build enabling infrastructure, establish rules, and reduce obstacles so that private capital can evaluate an opportunity.
That was part of what happened at El Seguro. And there are details of it in Impulsa's Sustainability Report.
There was also an aspect that, from my experience, is especially relevant.
At the beginning of this year I had the opportunity to participate in the first participatory water monitoring conducted in the El Seguro area. I was there during sample collection, along with neighbors, technical teams, and public agencies, and I was able to see firsthand how parameters such as pH, temperature, conductivity, and dissolved oxygen are recorded and then analyzed in the laboratory.
The experience allowed me to see something that in public debate is often reduced to a slogan: trust is also built with information that can be observed, explained, measured, and verified.
Social license also enters the balance
Social license usually appears in mining discussions as an intangible concept. But its consequences can be very concrete.
A project that faces prolonged conflicts, lack of information, territorial opposition, or unpredictable institutional processes can suffer delays, higher costs, and changes in its development conditions.
That is why social license is not simply a matter of image.
It can become a hard variable in investment risk.
MalargĂĽe, one of Mendoza's Mining Districts.
In Mendoza, any mining project will continue to have to go through environmental controls, comply with current legislation, and coexist with a society that has a specific history regarding the activity and water.
Law 7.722 did not disappear. Neither did the debate.
What changed is the possibility of addressing it from an institutional framework that seeks environmental and technical information to be available and that participation forms part of the process.
Predictability does not mean absence of controls.
It means that the rules are known, that controls can be applied, and that actors can make decisions with information.
In fact, the PSJ Cobre Mendocino project—the most advanced and which will begin mine construction at the end of 2027—updated its water use technology, which will allow it to optimize consumption without affecting production levels.
From geological asset to productive development
But attracting capital cannot be the endpoint. It is just the beginning.
The real question for Mendoza should be how much value the provincial economy can capture around that investment.
Each exploration stage can require transportation, logistics, laboratory, engineering, maintenance, technology, consulting, accommodation, food, training services, and specialized human resources.
For that spending to transform into local development, it is not enough to have a mining company.
You need prepared suppliers, trained workers, companies capable of financing their growth, educational institutions connected with new demands, and policies that allow developing a value chain around projects. And in my personal case, as a student of the first cohort of Finance Technicians, I am convinced of becoming an analyst that can connect our resources with investments and generate businesses around energy.
There mining stops being only a discussion about the subsurface.
It becomes a discussion about human capital, businesses, infrastructure, knowledge, and the ability to capture value.
And that is probably one of the most important challenges Mendoza faces ahead.
Presentation of the mining investment platform.
From bad word to the price of trust
The El Seguro case does not allow us to claim that Mendoza already has a copper mine.
What it does allow us to observe is something else.
An asset that a few years ago was far from being a concrete investment opportunity went through a series of stages: technical information, environmental assessment, infrastructure, participation, public tender, and private operator selection.
Now begins a stage in which geology will have to speak.
BHP is not buying copper produced today. It is allocating resources to the possibility of finding it.
And that difference is fundamental.
Mendoza has not yet found a mine at El Seguro, the case we analyze today. It is beginning to build the conditions for capital to look again at its mining potential as an asset class. The challenge now is to turn that trust into exploration, exploration into knowledge, and that knowledge into investment, employment, and productive development.
The challenge for Mendoza does not end in attracting capital. It also consists of building the capabilities to connect it with its resources, companies, and projects.
Mining can be an opportunity to develop a specialized financial ecosystem: financing tools, investment structures, professional services, insurance, capital markets, and knowledge applied to the specific needs of the industry.
In that construction, the idea of an Andean Bridge Hub makes sense: connecting the region's resources and productive projects with capital, but also bringing financial tools of its own closer to an industry that needs financing at each stage of its development.
Because if exploration allows transforming geological uncertainty into information, the financial system must be capable of transforming that information into investment and financing alternatives.
The ultimate goal should not be only that capital comes to Mendoza. It should be that Mendoza develops increasing capacity to understand it, structure it, channel it, and transform it into investment, suppliers, employment, and more opportunities.