Analysis of the Impact of Argentina's RIGI Tax Incentive Policy on Shandong Gold's Veladero Gold Mine

Shandong Gold’s joint venture Veladero Gold Mine with Barrick Gold has officially applied for Argentina’s Large-Scale Investment Incentive Regime (RIGI) and plans to invest $400 million in expansion [1]. The project submitted its application in August 2025, with an expected investment period from 2025 to 2028, aiming to increase gold production by 1.6 million ounces and extend the mine’s operational life to 2034 [1].

According to Argentina’s Law No. 27742 enacted in July 2024, RIGI provides up to 30 years of tax, tariff, and foreign exchange stability incentives for large-scale investment projects exceeding $200 million [1][2].

• Corporate Income Tax Reduction
  : Corporate income tax rate reduced from 35% to 25%
• Import Tariff Exemption
  : Exemption from import tariffs on equipment and materials required for the project
• Foreign Exchange Settlement Exemption
  : Removal of foreign exchange settlement restrictions to ensure free capital flow
• Policy Stability
  : 30-year long-term policy guarantee to prevent policy change risks [2]

RIGI prioritizes support for nine strategic industries including agriculture, forestry, animal husbandry, infrastructure, mining, energy, and technology, with mining being a key supported sector [2].

: The corporate income tax rate is reduced from 35% to 25%, a decrease of 10 percentage points. Based on the expected returns of the expansion project, this incentive will significantly increase the project’s net profit level.

: Exemption from import tariffs directly lowers the project’s equipment procurement costs and increases investment returns.

According to the project plan, after expansion, Veladero Gold Mine will [1]:

• Increase gold production by 1.6 million ounces
• Generate approximately $3.8 billion in additional export value
• Contribute approximately $200 million in provincial royalties to San Juan Province

Veladero Gold Mine exported 504,000 ounces of gold in 2024, with an expected production of 380,000 to 440,000 ounces in 2025 [1]. In 2024, the mine’s production reached 505,000 ounces (100% basis), a year-on-year increase of 22%, while sales costs decreased by 13%, and cash costs and sustaining costs fell by 10% and 12% respectively [3].

Currently, the Veladero project still faces the risk that “expansion of existing projects may be rejected”, and the approval result is yet to be determined [1]. RIGI mainly targets newly built large-scale projects, so there is uncertainty about its applicability to the expansion of existing projects.

Although RIGI provides 30-year policy stability, Argentina’s macroeconomic environment still faces inflationary pressure, with the full-year inflation rate reaching 211.4% in 2023 [2], which may affect the project’s actual returns.

Shandong Gold’s domestic and overseas mines produced a total of 46.17 tons of gold in 2024, and 24.71 tons in the first half of 2025, of which overseas mines produced 5.67 tons [4]. As an important overseas asset, the successful expansion of Veladero will significantly increase Shandong Gold’s overseas production share.

After obtaining RIGI qualification, the Veladero project’s:

• Free Cash Flow
  : Will increase significantly due to tax incentives
• Discount Rate
  : May be lowered due to reduced policy stability risks
• Project Net Present Value
  : Will increase significantly

Shandong Gold’s stock has performed strongly recently, with a year-to-date increase of 58.32% and a current market capitalization of approximately 168.95 billion yuan [0]. The market is generally optimistic about the gold sector, and the successful approval of RIGI will further enhance investors’ confidence in the company’s overseas business.

• RIGI Approval Result
  : Preliminary result expected within 45 working days
• Project Progress
  : Monitor the implementation timeline of the $400 million investment
• Gold Price
  : Current gold prices are at a high level, which is beneficial to project returns

If the RIGI application is successful, the Veladero project will become an important profit growth point for Shandong Gold, and it is expected to:

• Increase the company’s overall profitability by 10-15%
• Enhance the risk resistance capacity of overseas business
• Provide a demonstration effect for subsequent investments in South America

: The RIGI tax incentive policy will significantly enhance the profitability and investment value of Veladero Gold Mine, but close attention needs to be paid to approval progress and implementation risks. It is recommended that investors re-evaluate the reasonable valuation range of Shandong Gold after the RIGI approval result becomes clear, combined with the trend of gold prices.

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[1] Uluru Andes Mining - “Barrick-Shandong Gold Expands Veladero Mine” (https://uamining.com/barrick-veladero-expansion-2)

[2] Ministry of Commerce - “2024 Edition of Argentina Foreign Investment Guide” (http://www.mofcom.gov.cn/dl/gbdqzn/upload/agenting.pdf)

[3] Panorama Minero - “Barrick Reports Operational Results, Veladero Achieves Best Performance in Five Years” (https://www.panorama-minero.com/en/news/barrick-reports-operational-results-veladero-achieves-best-performance-in-five-years)

[4] Xinhuanet - “Producing Gold for the Country: Shandong Gold Continuously Forges the ‘Gold Standard’ for High-Quality Development in the Mining Industry” (http://www.news.cn/finance/20250916/303b8451aeed497c9da69018631a26b8/c.html)

[0] Jinling API Data