Mining magnate Rob McEwen is seeking approximately $100 million for his Los Azules copper project in Argentina, leveraging the potential benefits of deregulation under President Javier Milei's new government.
According to reports, McEwen Copper, McEwen's privately held firm, is engaging with existing stakeholders like Stellantis NV (NYSE:STLA, EPA:STLA) and Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) venture Nuton LLC, as well as potential new investors, to secure fresh funds within the next six months for feasibility and engineering work.
The discussions also include longer-term possibilities, such as enhanced partnerships with major mining companies like Rio Tinto.
The Goldcorp founder told media that he sees an opportunity in President Milei's efforts to liberalize Argentina's tightly controlled economy, potentially unlocking significant copper deposits in San Juan province, Bloomberg reported.
McEwen aims to build the $2.5 billion Los Azules mine, targeting a startup toward the end of the decade to meet increasing demand for copper in the transition away from fossil fuels.
In 2022, Los Azules was ranked in the top 10 largest undeveloped copper deposits in the world by Mining Intelligence.
Javier Milei, a libertarian who assumed office last December, is advocating for reduced bureaucracy, elimination of customs and capital restrictions, and other regulatory reforms to attract investors.
Mining investors are hopeful that the changes, if implemented, would reduce risks for investors, who currently remain cautiously optimistic.
TNR Gold Corp (TSX-V:TNR, OTC:TRRXF) CEO Kirill Klip expressed optimism about the mining landscape in Argentina under President Milei, highlighting the potential benefits for projects like Los Azules due to a perceived reduction in environmental regulations and an overall positive outlook for the mining sector.
TNR Gold holds a 0.4% NSR royalty on the Los Azules project, of which 0.04% of the 0.4% NSR royalty is held on behalf of a shareholder.
“Argentina’s new president Javier Milei represents a low risk to domestic mining projects; the state’s provincial jurisdictional buffer will buffet any radical policies regarding Sino-affiliated projects, plus a goal of boosting national mineral exports keeps lithium and copper projects guarded,” Klip told Proactive.
“On another hand, Argentina’s new president is great news for copper projects in the region, more so for Western-backed miners.”
Tax incentives proposed for large Argentine infrastructure projects in Milei's legislation could play a crucial role in attracting partners, providing additional taxation stability for future financing discussions with the international community.
What’s more, Milei's commitment to boosting mineral exports aligns with a pro-business stance, potentially creating a conducive atmosphere for the development and operation of mining projects.
“Described as an ‘anarcho-capitalist’ and a ‘rabid’ free marketeer, Argentina’s new president Javier Milei would have to display a degree of self-contradiction to uproot prospective lithium, copper and gold projects, as it would go against a self-proclaimed goal of boosting mineral exports,” Klip added.