Austral Insights #05

Welcome to Austral Insights, your go-to source for understanding Argentina's key developments. Each week, we bring you concise, business-focused insights into the country’s politics, economy, and strategic sectors—providing the local perspective you need to make informed decisions.

Argentina by the numbers:

*_{Emerging Markets Bond Index (JP Morgan)}
**_{The S&P MERVAL Index tracks the largest, most liquid stocks on Argentina’s exchange, meeting size and liquidity requirements}

This week’s highlights:

• AbraSilver to invest USD 500M in Salta-Catamarca, advancing its final feasibily study.

• Gas firms TGN & TGS join Argentina-Brazil working group to discuss gas export routes; Bolivia pipeline favored, but carries high political risk

• Tether Investments expands into Argentine agribusiness, reportedly acquiring shares of Bioceres, alongside a recent bid for 51% of Adecoagro.

• IMF negotiations advance; board reviewing Argentina deal, with Milei targeting mid-April approval.

• Cristina Kirchner re-emerges with forward-looking speech; acknowledging need for State reform while attacking Milei’s IMF deal & judicial appointments.

• Inside Congress: Commissions debate key infrastructure and mining issues; Public Works session highlights provincial concerns, while Mining Commission reinforces sector growth momentum.

• What do Argentines think about..? Milei’s approval drops to 45% (-9 pts since November), but he remains Argentina’s most popular political figure (43% positive image); only 36% express satisfaction on “how things are going” in the country.

Mining

AbraSilver has confirmed plans to invest over USD 500m in Argentina’s northwestern mining corridor, specifically on the Salta-Catamarca border. In a meeting with Catamarca’s governor, company officials emphasized the economic benefits, including the creation of 1,200 jobs and the project's potential eligibility for RIGI (Large Investment Incentives Regime). AbraSilver is advancing its final feasibility study, set for completion in 2026.

Oil & Gas

Gas firms TGN and TGS joined the Argentina-Brazil energy working group on March 20, providing their input on the best way to transport Argentine gas to Brazil. The leading option is using Bolivia’s pipeline network, but political instability there poses a major supply risk. An alternative—building new infrastructure through Argentina’s northeast border with Brazil—would require significant investment. While private sector players will make the final decision, Lula da Silva’s political ties to Bolivia could pressure companies to favor the higher-risk Bolivia route.

Agribusiness

Tether Investments (issuer of USDT stablecoin) has reportedly acquired shares of Argentine biotech firm Bioceres, which specializes in drought-resistant seeds. While neither party has confirmed the deal, Bloomberg Línea reports that Tether is capitalizing on Bioceres’ 70% stock decline since its 2022 peak. This aligns with Tether’s broader strategy of expanding into agriculture, following its recent bid to acquire 51% of Adecoagro, another major Argentine agribusiness player.

IMF

Argentine media reports that IMF technical staff have begun internal discussions with the board regarding the upcoming Argentina program. While the IMF describes negotiations as progressing within standard internal processes, Milei has publicly stated he hopes to finalize the deal by mid-April.

Politics

Following her US entry ban over corruption allegations, former President Cristina Kirchner delivered a speech at an Education Congress at Buenos Aires University, positioning herself as a leading opposition figure ahead of the midterms. Key takeaways:

• Criticism of the IMF deal: she labeled it a "blank check" for Milei and condemned Peronist lawmakers who backed the recent decree.

• Attacks on Supreme Court nominations: rejected Milei’s use of decrees to appoint Supreme Court justices.

• Reevaluating the State’s role: Argued for a Peronist-led restructuring of the State to prevent future dismantling by leaders like Milei. While rhetorical, her comments implicitly recognize Argentina’s bloated bureaucracy as a core issue—a notable shift given Peronism’s historic stance.

While this doesn’t signal a political consensus on State reform, Cristina addressing her support base in this terms might suggest that she sees the Argentine median voter as tilting toward a more efficient, if not smaller, State. This potential shift is definetely worth watching.

Inside Congress

This week’s legislative activity focused on key commission meetings, with Public Works and Mining as two key ones to watch.

• Public Works Commission (March 25): The session aimed to address national road infrastructure, a contentious issue following Milei’s abrupt halt on public works projects. Provincial authorities criticized the freeze. This has particular impact on transport infrastructure, especially affecting mining (Lithium Triangle) and oil & gas (Vaca Muerta). The absence of the National Secretary for Public Works and the National Roads Administrator further signaled the administration’s disregard for the sector, raising concerns for investors reliant on logistical improvements.

• Mining Commission (March 26): Lawmakers, the National Secretary of Mining, provincial officials, and industry representatives discussed sectoral growth, investment momentum, and regulatory clarity. Officials reaffirmed the strategic importance of RIGI and noted the shift from a “country with mining provinces” to a “mining country”—a positive signal for long-term industry development. Discussions also touched on challenges, including strengthening local supply chains, ensuring environmental compliance, and extending investment incentives to existing projects, not just new ones.

What do Argentines think about…?

The latest Political Satisfaction and Public Opinion Survey from San Andrés University (March 11-20) reveals mixed signals for the Milei administration:

• 36% of respondents are satisfied with “how things are going” in the country, while 61% express dissatisfaction.

• Milei and Bullrich voters report higher satisfaction levels, while Massa’s voters remain overwhelmingly dissatisfied.

• Milei’s approval rating stands at 45%, with 52% disapproval, marking a 9-point drop since November.

• Despite this decline, Milei remains the political figure with the highest positive image, at 43%.

While approval is slipping, Milei’s personal brand remains strong and his core voters are, overall, still supporting his administration—key factors as he navigates an increasingly challenging landscape.

Are you interested in the risks and opportunities that Argentina presents? Is there an issue you’d like to discuss or understand in greater depth? Reach out for a free 30-minute talk at [email protected].

See you next week with more insights!