Big copper companies look at Argentina again, says McEwen

Huge deposits and more favorable policies have made Argentina at a point of attraction lithium in recent years. Now the world industry copper has turned to look at the South American nation.

That’s the view of Rob McEwen, whose namesake company is drilling a property in San Juan province, near the Chilean border. Called Los Azules, it has attracted the attention of big producers including Vale SA, Anglo American Plc and Barrick Gold Corp. as a potential acquisition, he said. The three companies declined to comment.

While McEwen is seeking to advance the project further before considering a sale, the interest from large companies is a sign of copper’s auspicious outlook as a key component in the clean energy transition, as well as Argentina’s growing attractiveness as a a mining jurisdiction, McEwen said Wednesday in an interview.

Argentina, where interventionist policies have held back industry, is becoming a more attractive setting for foreign investors, at least in some of its mineral-rich provinces. The government sees mining as a way to attract more foreign exchange to resolve its persistent debt problems, while politicians in the more established jurisdictions of Chile and Peru seek a larger share of the industry’s profits and tighter regulation, which increases the attractiveness of Argentina.

Lithium deposits in the country, already a sizeable gold producer, are attracting billions of dollars as global demand for electric vehicles rises, while a unit of Australian iron ore miner Fortescue Metals Group Ltd. is studying options to produce hydrogen from wind power.

“We have seen a number of large companies that have reached out and taken a close look at Argentina,” McEwen said. “That in itself is giving more comfort to foreign investment.”

For now, he wants to increase the value of Los Azules by moving to the pre-feasibility stage over the next year and a half. The company is deploying drilling equipment and building an access road, although work has been delayed by cultural preservation efforts following the fossil find.

The omicron wave has also hit some operations in Argentina, including McEwen’s gold-silver joint venture with Hochschild Mining Plc in Santa Cruz province, he said.

While McEwen may be focused on Argentine copper at the moment, the Goldcorp founder and former chairman continues to keep a close eye on the gold market.

The yellow metal has lagged behind other commodities in recent times. But the inflationary environment will eventually bring gold and silver back into fashion as the broader bull market runs out of steam, he said.

“I think we should see a 100% move in gold and silver if it’s going to stay in line with other commodities.”