Javier Milei Transformed Ycrt Into a Corporation for Its Privatization

The Government of Javier Milei continues with his plan for privatization of state-owned companies, and after the reconversion of Banco Nación, it is now advancing with Yacimientos Carboníferos Río Turbio (YCRT).

The transformation of the mining complex into a corporation is the first step in the process of restructuring and eventual sale to private investors.

Transformation into a corporation and deficit reduction

The decision was formalized through Decree 115/2025, published in the Official Gazette and signed by the President. The measure was promoted by Diego Chaher, head of the Public Companies Transformation Agency, and establishes that 95% of the shareholding will remain under the Secretariat of Energy and 5% under the Secretariat of Mining, both dependent on the Ministry of Economy.

The conversion of YCRT into a corporation seeks to provide it with greater operational efficiency and reduce the state contributions necessary for its operation, in line with Milei's strategy to decrease the fiscal deficit. In this regard, the new corporation must present within 60 days (with an additional 30-day extension) a budget that minimizes contributions from the National Treasury, as well as an investment plan that ensures its operability.

A complex privatization process

YCRT is one of the nine state-owned companies included in the Bases Law as subject to privatization or concession. However, the path to its sale will not be immediate: the Government must first restructure its financial and operational structure. In this context, work will be done on the regularization of balances, updating of internal regulations, and optimization of resources.

The state-owned company faces a deep crisis that combines structural, economic, and political problems. Among the main challenges are:

• Overstaffing, with a cost structure that is not justified by the level of production.
• Lack of investment in technology and machinery, which limits its extraction and marketing capacity.
• Irregular handling of funds and administrative problems, with a history of corruption in different administrations.

The role of Santa Cruz in the restructuring

The governor of Santa Cruz, Claudio Vidal, was notified of the measure by the Chief of Staff, Guillermo Francos. The relationship between the national Government and the provincial leader has been fluctuating, so Milei's administration avoided advancing without his knowledge.

In Santa Cruz, there is suspicion that the Nation will seek for the province to assume responsibility for the mine and the workers, while the power plant -considered the most profitable part of the complex- would pass into private hands.

This possibility has caused political tensions, especially after the appointment of Pablo Sebastián Gordillo Arraigada, a trusted man of Vidal, at the head of YCRT.

Coal production and logistical limitations

Despite operational problems,  Río Turbio coal is in demand in the international market, particularly in China, which requires large volumes for its industry. However, the current production of the mine doesn't reach the levels necessary to supply this market:

• China demands a minimum production of 30,000 tons per month, while YCRT could only reach 20,000 tons at best.
• The geographical location is a barrier: the coal must travel 300 km to the port, which raises logistical costs and reduces its competitiveness.

Prior to the publication of the decree, local experts considered that a long-term state investment plan could improve the efficiency and viability of the mine. However, the Government dismissed this alternative, as it contradicts Milei's goal of reducing public spending and the fiscal deficit.

Uncertain future and privatization challenges

The Government has not yet defined when the sale of YCRT will be finalized, although it is known that three business groups have expressed interest in the purchase. Meanwhile, the priority will be to advance in cost optimization, reduction of unnecessary personnel, and accounting adjustments to make it attractive to potential investors.

The process is not without challenges: in addition to the structural difficulties of the company,  there are political and union resistances that could hinder the progress of privatization. However, for Milei's administration, this is a key step in its plan to downsize the State and reduce the fiscal deficit.