Austral Insights #15

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:

• OTAMERICA inaugurates the expansion of its port terminal in Puerto Rosales, a key step to overcome one of the key bottlenecks limiting Vaca Muerta’s export potential.

• Cristina Fernández de Kirchner announces candidacy for Buenos Aires Provincial Legislature, elections to take place on September 7.

• Inside Congress: Deputies approve pension hike, Milei vows veto; committees address defense, fishing, and declare pediatric health emergency

• What do Argentines think about..? New poll shows Milei’s image and approval ratings recovering, with rising public satisfaction and strong positioning ahead of the midterms.

Mining

Salta's state-owned company, Recursos Energéticos y Mineros de Salta (REMSa), has launched Mining Project Competition No. 03/25. This initiative invites bids for the study, prospecting, exploration, and potential exploitation of four exclusive areas of special interest located in the departments of Los Andes and La Poma. The projects may focus on the production of lithium carbonate, potassium chloride, gold, copper, iron, and/or other minerals of interest. Bidders are required to submit an investment plan, an environmental compensation program, and a contribution to the province's social or infrastructure fund designated for public works. Proposals will be accepted until June 24.

Oil & Gas

In an essential step to overcome some of the key bottlenecks limiting Vaca Muerta’s export potential, OTAMERICA inaugurated its Rosa Negra project in Puerto Rosales, a significant expansion of its port terminal. This USD 600m project will allow the operation of large vessels, triple the storage capacity and improve the logistical efficiency of the national crude oil transportation system. Projections estimate that this will allow to increase the country’s export capacity to 300,000 barrels a day.

Following the collapse of its acquisition attempt of Phoenix Resources' assets in Vaca Muerta, Colombian oil company GeoPark faces new challenges. Shortly after the deal's failure, Argentine firm Pampa Energía acquired a 10.17% stake in GeoPark, raising concerns about a potential hostile takeover. In response, GeoPark has implemented a "poison pill" strategy—a shareholder rights plan designed to prevent any single entity from gaining undue control without board approval. This plan activates if Pampa Energía acquires 12% or more of GeoPark's common stock without board consent.

Politics

Former President Cristina Fernández de Kirchner has announced her candidacy for the Buenos Aires Provincial Legislature in the upcoming September 7 elections. She will represent the third electoral section, a Peronist stronghold encompassing key municipalities such as La Matanza. Her decision aims to bolster Peronism's performance in the provincial elections, which she said to be essential if Peronism seeks to perform strongly in the national midterms in October. Fernández de Kirchner's return to active politics comes amid internal divisions within the Peronist movement and ongoing legal challenges.

Inside Congress: your weekly legislative monitor

• The Chamber of Deputies approved a pension bill driven by the opposition, which includes a 7.2% increase in pensions and an ARS 110,000 bonus. President Milei has already announced his intention to veto the measure, arguing it would compromise the government’s zero-deficit fiscal strategy.

• The Defense Committee received the Defense Minister, who delivered a pointed critique of the previous administration’s management of the armed forces.

• In the Industry Committee, representatives from the fishing sector raised concerns about the sector’s viability under current conditions.

• The Public Health Committee issued its opinion in favor of a bill declaring a two-year public health emergency for pediatric care and national nursing homes.

What do Argentines think about…?

The latest Political Satisfaction and Public Opinion Survey conducted by San Andrés University (May 21–29) offers cautiously positive news for the Milei administration.

• 42% of respondents expressed satisfaction with “how things are going” in the country, an increase from 36% in March. Dissatisfaction dropped to 55% from 61% in the same period.

• Voters who supported Milei or Bullrich in 2023 show significantly higher satisfaction levels, while voters of Peronist candidate Sergio Massa remain overwhelmingly dissatisfied.

• Satisfaction with government institutions remains low overall, with 33% expressing satisfaction with the Executive Branch, 15% with the Judiciary, and just 14% with Congress.

• President Milei’s approval rating stands at 49%, with 48% disapproving, an improvement over March.

• Milei also leads the image rankings, with a 44% positive image, followed by Vice President Victoria Villarruel and Security Minister Patricia Bullrich, both at 40%.

• Opposition leaders continue to lag: Axel Kicillof leads among them but with only a 28% positive image. Notably, all political figures surveyed have a net negative image.

Taken together, these results suggest the administration has rebounded from its March dip in public support. If sustained, this recovery positions La Libertad Avanza strongly ahead of both the September provincial (Buenos Aires province) and October national midterms.

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!