Italian state distributorand co-producer Istituto Luce has set its sights on Argentina as a newco-production partner, and is lining up a new picture by Argentine directorMiguel Pereira, who previously made La Deuda Interna.

Entitled La Mula, the film will have a budget of up to $3.8m, and isabout a girl who smuggles drugs from Argentina to Italy.

The film, written anddirected by Pereria, will focus on the girl's relationship with anItalian relative she meets when she reaches her destination.

Pereira, who won Berlin'sSilver Bear for La Deuda Interna,will shoot the picture for 10 weeks in and around Buenos Aires andItaly.

Claudio Corbelli'sArgentinian outfit, Kapa Blanca Films, is producing the film together withIstituto Luce.

"We are reallyinterested in making films with Argentina. It's a very exciting place atthe moment and it costs around one third less to make a film therecompared to Italy," says Istituto Luce CEO Luciano Sovena.

"I also like to see howfilm industries work in other territories and I think it's now essentialto make international films with international stories," he says."It's no longer possible to make films that are strictly Italian, eitherin terms of content or production."

Istituto Luce is alsoco-producing an Argentinian-Italian film directed by Rosalia Polizzi (Reconciled,The Rebel Years). The $2.55m contemporarythriller will focus on Argentina's recent economic crisis.

The film will star eitherValeria Bruni-Tedeschi or Stefania Rocca.

Istituto Luce'sinternational co-production slate includes Bille August's Nelson Mandelaproject Goodbye Bafana, which issold internationally by Celluloid Dreams.

The film, whose budget hasbeen reported at $30m, is currently shooting in South Africa, and is co-producedby David Wicht's Film Afrika.

Luce is also lining upItalian director Mimmo Calopresti's next film, L'Invito. The $1.5m film is sold by Celluloid Dreamsand produced by Rome-based Luciano Martino of Dania Film with backing from the Italianregion of Calabria.

Producers are in talks withGerard Depardieu to star in the film, which was written by Caloprestiand Monica Zapelli and is about a group of young southern Italianfilmmakers trying to find the protagonist of their film in Cannes.

Other projects include a RaiCinema-backed debut by Francesco Amato, called Che Ci Faccio Qui, about a student who goes interailing with hisfriends across Europe after his final school exams. The picture, which iscurrently in post, also has backing from Italy's national film school, theCentro Sperimentale.