AGP Executive Report

Lithium Investment: Rio Tinto opened two projects in Catamarca after investing $1.4 billion. They will add 25,000 tonnes of annual lithium capacity as the miner targets 200,000 tonnes a year in Argentina by 2028. Fiscal Policy: The IMF reached a staff-level deal on its latest review, potentially unlocking $900 million, while President Javier Milei is expanding government workforce cuts. Trade & Industry: Duty-free incentives have fueled a surge in Chinese EV imports, sharpening debate over whether Argentina should build a domestic supply chain linking its lithium to vehicle production. Agriculture: Strong corn and wheat output is expected, and Argentina could gain soymeal sales to Europe as deforestation rules threaten Brazilian trade. Investment Rules: Argentina has introduced a citizenship-by-investment route, offering qualifying investors a path to citizenship without the usual two-year residency requirement.

IMF Financing: Argentina and the IMF reached a staff-level deal on the third review of the country’s program, potentially unlocking $900 million pending approval. The Fund backed Milei’s reforms as the government seeks to restore market access. Soymeal Exports: Argentina could win EU business as new anti-deforestation rules take effect on Dec. 30. Brazil, the bloc’s leading supplier, faces traceability hurdles that could put up to 4 million tonnes of exports at risk; Argentina says its long-established Pampas farmland gives it an advantage. Energy Investment: Neuquén awarded eight blocks to expand Vaca Muerta exploration, adding to efforts to grow Argentina’s shale output. Beef Trade: Argentina is tightening traceability for beef destined for Europe to help exporters meet stricter sustainability requirements.

IMF Funding: Argentina and the IMF reached a staff-level deal on the third review of the country’s $20 billion programme, potentially unlocking about $900 million pending board approval. The Fund praised Milei’s reforms and stronger reserves, while the government committed to a 1.4% primary surplus target for 2026. Markets: Lula’s election win rattled Brazilian markets and weakened the real, adding regional uncertainty as Argentina pursues fiscal adjustment. Energy Investment: Neuquén awarded eight blocks to expand Vaca Muerta exploration, supporting the push to grow Argentina’s shale sector.

Brazilian Market Shock: Lula’s reelection sent the Brazilian real down more than 8% and pushed stocks sharply lower as investors reassessed the outlook. The currency steadied and soybeans bounced in the latest trading, though improved supply expectations continue to weigh on grain prices — a key watchpoint for Argentina’s export sector. Energy and Mining: Argentina’s oil ambitions are gathering pace, with reports suggesting it could overtake Guyana in South American production and Chevron aiming to accelerate its local output. Argosy Minerals also upgraded its Rincon lithium resource and exploration target. Investment: The IDB approved a $200 million guarantee to strengthen Argentina’s electricity transmission network, supporting infrastructure investment. Public Finances: Aerolíneas Argentinas says it will not seek further state subsidies, a notable shift for a company long reliant on public support.

Brazil Shock: Lula’s 51.8% election win triggered a sharp market sell-off: Brazil’s real fell more than 8% and Ibovespa futures plunged 15%. Argentina has a major stake in the outlook: Brazil took 12.7% of Argentine exports in January–September, including more than 63% of vehicle exports. Shipments there rose 4.5% year over year, while imports from Brazil fell 17%. Farm Markets: Soybean futures hit a two-month low as record harvest expectations weighed on prices; Argentina’s planted area is forecast to rise 1%. Wheat stayed near a 15-week low, with Argentina’s growing harvest adding to supply. Airlines: Aerolíneas Argentinas says it will not seek further state funding, citing two consecutive profitable years and cost controls, as Milei’s government pursues privatisation.

Lithium Finance: Lithium Argentina repurchased $200 million of its 2027 notes for about $198 million, leaving $59 million to repay by Jan. 15. The company says it has more than $100 million in cash and expects strong Cauchari-Olaroz cash flow to support further debt reduction. Trade Outlook: The EU-Mercosur agreement, in force since May, reduces tariffs on goods and services. The EU is Mercosur’s largest foreign investor and its second-largest trading partner, making the deal significant for Argentina’s trade prospects. Retail: Dia reported €1.10 billion in Argentina sales for the first nine months of the year, up 21.8% at constant exchange rates but down 5.3% at current rates. Investment Policy: Milei’s government has proposed a citizenship-by-investment program, with eligibility tied to a $350,000 payment or an $800,000 bond purchase. The plan has not yet gone to Congress and is drawing opposition criticism.

Flood Disruption: Flooding in northeastern Argentina has killed two people and displaced thousands, threatening communities and local activity as rivers continue to rise. Agriculture & Trade: Brazilian soybean meal is trading at a wider discount to Argentine product than at any point since January, as port congestion in Paranaguá disrupts loading and weighs on export prices. Energy: Vista Energy reports third-quarter results on Oct. 28, with its first full quarter of recently acquired Vaca Muerta assets; the company’s performance will offer a fresh read on the shale boom as Argentina also loses a senior energy official. Privatisation & Investment: Milei’s government has sealed a water deal seen as a win for its privatisation agenda, while the IFC is offering up to $20 million to support Universidad Siglo 21’s campus expansion. Regional Outlook: Brazilians are voting in a close presidential runoff, with the result likely to shape policy in Latin America’s largest economy and its ties with Argentina.

Economic Outlook: Javier Milei’s price-stabilization drive has delivered some recovery, but households remain under pressure; weak activity and bond-market jitters are deepening concern ahead of next year’s elections. Energy Investment: Chevron aims to accelerate its Argentina output toward a threefold increase, while GeoPark has expanded its Vaca Muerta acreage — bets on growth even as the loss of a senior energy official raises questions about policy continuity. Regional Markets: Brazil’s knife-edge runoff is keeping investors cautious: a Flávio Bolsonaro win could spur reform hopes, but the tight race leaves Brazilian assets exposed to a reversal. LIBRA Fallout: A judge dismissed the probe into Milei over the cryptocurrency collapse; press groups condemned his subsequent threats against journalists who covered the case.

LIBRA Case: An Argentine judge dismissed the criminal investigation into President Javier Milei and others over the collapsed LIBRA token, ruling that investigators had not established a crime. Milei then targeted five journalists who reported on the case, keeping scrutiny on the scandal alive. Energy and Investment: Chevron aims to triple its Argentine output, boosting hopes for Vaca Muerta, but the departure of the country’s top energy official raises questions about momentum in the shale sector. The IDB also approved a $200 million guarantee to strengthen the electricity grid. Economic Pressure: Milei’s reforms face headwinds as bond-market jitters grow ahead of elections and a survey finds eight in ten Argentines struggle to make ends meet. Regional Trade: Brazil’s close presidential runoff is being watched in Argentina, one of its key trading partners, as the next government faces choices on fiscal policy and growth.

Crypto Case: A federal judge dismissed the LIBRA investigation into President Javier Milei, his sister and nine others, after prosecutors concluded the alleged conduct did not amount to a crime. Energy Investment: Argentina’s shale ambitions face a possible setback after the departure of a senior energy official, even as Chevron says it aims to triple its output in the country. The IDB also approved a $200 million guarantee to strengthen electricity transmission. Agriculture: A 13% upward revision to Argentina’s wheat production forecast added to ample global supply and helped push wheat futures to three-month lows.

Energy Investment: Chevron plans to triple its Argentina production, adding rigs at Vaca Muerta’s El Trapial block by 2029 and seeking approval for a $13.8 billion, 30-year investment. Legal and Market Risk: A judge dismissed the $LIBRA case against Javier Milei, his sister and nine others, finding no crime; investors lost an estimated $100 million after the token collapsed. Offshore Dispute: Argentina’s bid to halt the Sea Lion oil project near the Malvinas has drawn UK warnings about economic consequences for British and US companies, adding uncertainty for offshore development. Infrastructure and Trade: The IDB approved a $200 million guarantee for Argentina’s electricity transmission network, while exports reached $77 billion as the country posted another trade surplus. Economic Strains: Other reports point to country risk at an 11-month high and the lowest number of companies in 19 years.

Energy Investment: Chevron is bringing US expertise to Vaca Muerta and plans to triple output from its El Trapial block by early 2029. It is seeking approval for a proposed $13.8 billion, 30-year expansion, betting Milei’s reforms can unlock the shale region’s potential. Power Infrastructure: The IDB approved a $200 million guarantee for transmission projects expected to improve electricity supply for 16 million users and draw private investment. Economic Outlook: Inflation has fallen sharply, but weak demand and stagnant activity are squeezing businesses and households; economists warn Argentina may be entering recession, while election uncertainty keeps pressure on the peso. Retail & Trade: Import liberalisation is attracting brands including Superdry, with H&M planning an Argentine debut in 2027, but subdued consumer spending and policy-reversal risks temper the opportunity.

Privatisation: Argentina selected a local-Brazilian consortium to buy the state’s 90% stake in Buenos Aires water utility AySA for US$340 million, a key win for Milei’s privatisation drive after a rail tender collapsed. Energy: GeoPark secured 24,200 net acres in Vaca Muerta, tripling its acreage, and priced US$550 million in senior notes as it expands in the shale basin. Argentina is also seeking an international ruling to halt the UK-backed Falklands oil project, raising tensions around a major prospective development. Economic Outlook: Recent reports point to a sluggish rebound after a sharp downturn, with recession risks and election jitters weighing on bonds. ECLAC forecasts growth of 1.9% in 2026 and 3% in 2027, while exports reached US$77 billion as Argentina posted another trade surplus. Digital Payments: Tether is backing Peso’s stablecoin payment infrastructure in Latin America; a regional survey found three-quarters of respondents would consider using stablecoins for everyday purchases and bills.

Economic Outlook: Argentina’s recovery remains fragile: recent coverage points to a sluggish rebound after a sharp drop, recession risks following August data, and a bond sell-off amid election concerns. Country risk has reached an 11-month high, while the number of companies is reportedly at its lowest in 19 years. Energy and Investment: GeoPark priced US$550 million in senior notes and secured the Corralera Noreste block, expanding its Vaca Muerta acreage as energy and mining continue to attract investor interest. Education Finance: The IFC is providing Universidad Siglo 21 with up to US$20 million to expand in Córdoba, initially committing US$10 million for campuses in Villa María and Río Cuarto. Digital Payments: Tether-backed fintech Peso plans to expand USDT payment services in Argentina and three other Latin American markets, while Circle and Allaria are partnering to boost USDC liquidity locally.

Economic Outlook: August activity rose just 0.1% month on month, far below forecasts, and fell 1.7% year on year. Economists see a possible third-quarter technical recession as weak manufacturing, construction and retail offset energy and farm exports. Markets and Debt: Argentine dollar bonds have slumped, with investors weighing Milei’s re-election prospects and about US$25 billion in hard-currency payments due next year. Energy Investment: GeoPark priced US$550 million in 9.5% notes, partly to refinance debt and fund Vaca Muerta development, and won a new block in the basin. Privatisation: Grupo Mexico’s withdrawal from the Belgrano Cargas rail tender is a setback for Milei’s plans to attract investment and cut freight costs. Stablecoins: Tether-backed fintech Peso plans to expand USDT payment services into Argentina and other Latin American markets; the investment amount was not disclosed. Oil Dispute: Milei says Argentina will pursue Falklands sovereignty diplomatically, as a tribunal prepares to hear its challenge to the Sea Lion oil project.

Oil and Investment: Argentina’s challenge to UK-backed oil exploration near the Falklands heads to a November 10–11 tribunal hearing. The Sea Lion project is estimated to hold 1.7 billion barrels. Markets and Debt: Country risk reached an 11-month high as Argentina faces heavy 2027 repayments; the Treasury’s gross financing needs are projected at $24.9 billion. Trade and Business: Exports reached $77 billion as the country recorded another trade surplus, but a separate report says Argentina has its fewest companies in 19 years. Energy and Mining: Milei promoted an energy boom and investment incentives, while Lake Resources secured a key environmental permit for its Kachi lithium project in Catamarca, clearing the way for engineering and financing work.