BUENOS AIRES, May 20 (Reuters) - Argentina's government

on Tuesday approved a $2.5 billion lithium mining project by

Anglo-Australian giant Rio Tinto , marking the

first mining project under a new investment incentive regime.

The approval of Rio Tinto's Rincon project, located in the

northern Salta province, under the RIGI incentive scheme was

announced by the country's mining and energy coordination

secretary Daniel Gonzalez at a conference in the capital Buenos

Aires.

Argentina's mining sector has expressed concerns over delays

in approvals for seven projects submitted to the government

since the RIGI program was launched nine months ago.

"We are grateful because there was strong anxiety over what

was happening with the mining RIGIs," the head of Argentina's

CAEM mining chamber, Roberto Cacciola, told the conference.

"This was major news."

President Javier Milei's libertarian government is looking

to boost the South American country's mining sector to bring in

much-needed foreign currency and maintain economic stability as

the country faces painful inflation levels.

Argentina is the world's No. 4 lithium supplier and together

with Chile and Bolivia forms the so-called "lithium triangle"

that holds the world's largest reserves of the white metal used

in electronics, electric vehicles and other key technologies.

The South American nation also exports gold and silver and

has major copper projects in the pipeline, though none are

currently producing.

Other firms that applied for mining projects under the RIGI

program include China's Ganfeng, Canada's McEwen

Copper and South Korea's Posco.

Five of the projects are for lithium, while the remaining

two are for gold and copper, respectively. However, only Rio

Tinto's project was approved as of Tuesday, despite a rule that

a decision must be made in a maximum of 45 working days.

Industry sources said the government likely did not

intend to cause delays, but it was facing complex approval

processes involving various state departments and some companies

may have rushed to apply at too early a stage to meet the

criteria.

Reuters contacted several state agencies, but they did

not immediately respond to requests for comment.

The RIGI framework is intended to provide tax and

customs benefits, access to international arbitration in case of

disputes and long-term stability plans.

Argentina exported $4.8 billion of minerals last year,

largely gold, followed by shipments of silver and lithium.