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Canadian entrepreneur Rob McEwen is in discussions to secure approximately $100 million for a copper project in Argentina, capitalising on the deregulation efforts of the new government led by Javier Milei. McEwen Copper Inc., his closely held firm, is engaging with existing stakeholders like Stellantis NV and a Rio Tinto Group venture, along with potential new investors. The goal is to secure fresh funds within six months for feasibility and engineering work, with potential long-term options including expanded partnerships with major mining companies such as Rio Tinto.
McEwen, an industry veteran and founder of Goldcorp Inc., anticipates that President Milei's initiatives to liberalise Argentina's tightly controlled economy will unlock vast copper deposits in San Juan province. The $2.5 billion Los Azules mine, envisioned by McEwen, aims to commence operations toward the end of the decade, aligning with the expected surge in demand for copper due to the shift away from fossil fuels.
President Milei, a libertarian who assumed office on Dec. 10, aims to reduce bureaucratic hurdles and eliminate customs and capital restrictions. Successful implementation of these changes, contingent on overcoming congressional opposition, could reduce investor risks. McEwen emphasises the need for swift action, considering the cyclical nature of metal markets and the potential for financing windows to close rapidly.
The Los Azules project is actively progressing, with 21 drill rigs on site, efforts towards a renewable-energy supply deal with YPF Luz, and a carbon-neutral leaching method under development. The project aims to secure environmental permits this year, with a feasibility study expected in early 2025 and pre-construction work slated for 2026, according to Michael Meding, the head of McEwen Copper.
While McEwen's copper unit initially planned to go public, it is now prioritising private fundraising due to current unfavourable market conditions for an initial public offering. Recognising the challenging investment climate in the mining sector, McEwen and Meding believe that the tax incentives proposed for large Argentine infrastructure projects in Milei's legislation could attract partners.
Meding highlights the potential classification of their project as a large-scale infrastructure initiative, providing additional taxation stability that could enhance future financing discussions with the international community.
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