A Canadian miner and one of the world’s biggest resource groups are preparing to invest nearly $18 billion in a copper deposit in the Andes that could become the fifth-largest producing mine on Earth if development proceeds as planned. Lundin Mining Corporation and BHP announced in February 2026 that their Vicuña project, straddling the Argentina-Chile border above 4,500 meters, contains 14 million tons of measured and indicated copper, 36 million ounces of gold, and 729 million ounces of silver.
At full capacity, the operation would produce 400,000 tonnes of copper annually over its first 25 years, roughly 2 percent of current global supply. The sulfide core at Filo del Sol grades 0.46 percent copper, or about nine pounds of metal per ton of rock, rich enough to remain profitable even in weaker markets.
BHP paid $2.1 billion in July 2024 for half the project, valuing the undeveloped asset at more than $4 billion before a single ounce had been mined. That price reflects industry anxiety about future supply. Global copper demand is expected to jump as electric vehicles, solar farms, and grid upgrades consume metal faster than new mines can replace depleting reserves. The International Energy Agency warned in its 2025 outlook that shortages could emerge by the mid-2030s if projects like Vicuña are delayed.
The Geology Behind the Numbers
The Vicuña district combines two porphyry systems discovered over the past 15 years. Filo del Sol, the larger deposit, contains 1.7 billion tons of copper-rich rock formed by mineral-bearing fluids rising from deep magma chambers and crystallizing in near-surface fractures. Drilling has traced mineralization across 6.5 kilometers, and multiple holes ended in ore-grade material, suggesting the deposit extends deeper than current models show.
Josemaria, 10 kilometers south, adds another 1.6 billion tons grading 0.28 percent copper. Lower grade, but still profitable above $3.50 per pound, well below current prices near $6.00. Shared infrastructure between the two sites cuts capital costs by an estimated $2 billion compared with developing them separately.
Filo del Sol’s value is not only copper. The sulfide zone averages 0.34 grams of gold per ton, equal to roughly 19 million ounces in the measured and indicated resource. At $5,000 per ounce, that gold would be worth about $95 billion in the ground, though only part would be recoverable. The mine economics run on copper, but the gold credits help keep costs low enough to withstand a major copper price decline.
An $18 Billion Gamble on Staged Construction
Lundin and BHP are not planning a single build. They are designing three expansions that bring production online in stages while delaying the largest capital outlays until earlier phases generate cash flow. Stage 1, budgeted at $7.1 billion, would build a 175,000-tonne-per-day concentrator and develop the Josemaria pit, with first production targeted for 2030 if permitting clears and construction begins by early 2027.
Stage 2 would add heap leaching at Filo del Sol to process surface oxides, a $3.9 billion expansion producing copper cathode and gold-silver doré around 2032. Stage 3 would expand the concentrator to 293,000 tonnes per day and shift mining to Filo del Sol’s higher-grade sulfide core, pushing annual copper output above 500,000 tonnes by the late 2030s. That final phase would cost another $7.1 billion.
The phased strategy reduces upfront risk but creates dependency. The headline economics assume all three stages are built on schedule. At current prices of $6.00 copper, $5,000 gold, and $80 silver, net present value reaches $28.8 billion and internal rate of return rises to 25.5 percent. Delay Stage 3, remove today’s metal prices, or hit permitting obstacles, and returns compress quickly. Lundin’s preliminary assessment does not include downside cases.
The companies want a final investment decision by late 2026. That depends on amended environmental permits, power agreements with Argentina’s grid operator, and approval under the country’s investment incentive regime for projects above $200 million.
Water, Arsenic, and the Hard Part No One Sells
The Vicuña project sits in one of the driest places on Earth. Annual precipitation is under 100 millimeters. Glaciers are the only reliable freshwater source. Argentina’s National Glacier Law, enacted in 2010, prohibits mining that could contaminate or destabilize glacier-fed systems. Environmental groups argue Filo del Sol’s pit could affect periglacial permafrost zones. Lundin disputes that, saying surveys place mineralization outside protected areas.
Water risk is not theoretical. Stages 1 and 2 would draw from three groundwater well fields, but Stage 3 would need another 2,000 liters per second beyond what local aquifers can provide. The proposed solution is a desalination plant on Chile’s Pacific coast and a pipeline stretching more than 200 kilometers inland and climbing 4,000 meters. That alone would cost an estimated $3 billion and depend on Chilean permits, coastal access, and energy-intensive reverse osmosis using roughly 50 megawatts.
Then there is arsenic. Copper concentrate from Filo del Sol’s sulfide zone contains unusually high arsenic, around 2 percent, far above the 0.5 percent level many smelters accept. The fix is a $1.2 billion roasting step that would strip out arsenic before sale, converting concentrate into a form smelters can process. But roasting generates sulfur dioxide, which then must be captured and converted to sulfuric acid to meet emissions standards.
Argentina’s Biggest Foreign Bet in a Decade
Lundin says the project could generate $69 billion in taxes and royalties for Argentina over its life, though that figure comes from the company’s own model. San Juan province supports the development as a source of roads, jobs, and regional growth.
Construction would employ about 5,500 workers directly and 19,000 through contractors. Permanent operations would support roughly 3,000 jobs, many requiring technical skills that are scarce locally. Community leaders have pushed for hiring quotas and training, with mixed results so far.
Opposition remains quieter than at some Andean mines, but it exists. Environmental organizations have challenged the impact assessment, arguing it understates risk to wetlands sustained by glacial meltwater. Local farmers also worry aquifer depletion could take decades to reverse in such an arid climate.
What Happens If This Stalls
Copper analysts often treat Vicuña as if it were already certain. It is not. The project is still unsanctioned, unfinanced, and not fully permitted. If it stalls, projected mid-2030s copper deficits widen. The IEA estimates mines of this scale usually take 10 to 15 years from discovery to first production. Vicuña is moving faster than average, but output above 500,000 tonnes a year still lies beyond 2035.
Lundin sees Vicuña as the route to becoming a top-ten global copper producer. BHP brings experience, but execution remains the issue. The 50/50 joint venture requires unanimous approval for capital calls above $50 million, a threshold that will apply to almost every major contract.
The preliminary economic assessment filed in February 2026 runs more than 600 pages and will be followed by a definitive feasibility study later this year. Until then, the $18 billion price tag, 70-year mine life, and $69 billion tax estimate remain projections built on assumptions not yet tested.
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