Copper has become one of the most sought-after metals on the planet, and a Canadian firm with a massive deposit in Argentina is racing to secure the funding needed to bring it into production.
McEwen Copper is currently negotiating with Rio Tinto and other investors to raise the capital required for its Los Azules project. The company is aiming to start construction within a few years, with initial output targeted for around 2030.
Funding the project is no small task. The financing plan calls for existing investors to supply $600 million, while a new external backer - an industrial group, a trading house from Europe or Asia, or specialized mining funds - would provide another $600 million. The remaining capital would come from debt, including export credit agencies, project lenders, and possibly mezzanine financing.
McEwen Copper also expects to raise roughly $300 million through an initial public offering, which could occur as early as the fourth quarter of this year, depending on market conditions. The company has already shortlisted its IPO advisers. Managing Director Michael Meding emphasized that the discussions are not limited to Rio Tinto.
"The talks are with Rio, but also with others," he said.
Rio Tinto already has a 17% stake in McEwen Copper through its Nuton venture, which focuses on copper extraction technology. Rio declined to comment on the ongoing negotiations. Meding noted that Rio's long involvement gives it a deep understanding of the Los Azules project, giving it an advantage as a potential investor. Even if Rio supplied all $600 million, it would still be a minority shareholder in a business worth over $2 billion.
If all goes to plan, Los Azules would average about 205,000 tonnes of copper cathode each year over its first five years. Copper cathode is the refined product that manufacturers use to make wires, cables, and other components. That output would make Los Azules one of the largest untapped copper deposits in Argentina, a country eager for major mining investment. An injection of tens of billions of dollars could provide a meaningful lift to an economy that has struggled for years.
The ownership structure is concentrated. The largest shareholder is McEwen Inc., with 46%; Rob McEwen himself holds 13%, and Stellantis NV owns 18%. Stellantis, which is positioning for the electric vehicle transition, has been actively securing copper supplies. The company also signed an agreement with the International Finance Corp last year, which could help smooth the path for financing.
Even with the financing in place, the project faces more than just capital. Los Azules still requires detailed engineering work and the necessary permits before construction can begin. A final investment decision depends on completing these steps. The company has been moving forward with environmental and social impact assessments, and early work on the site is already underway.
Copper's strategic importance has grown as electrification and renewable energy projects drive demand for the metal. Argentina, which holds significant copper reserves, is watching the project closely as a potential catalyst for foreign investment and export revenue.
For investors, the story is about timing and execution. Copper prices have been volatile, but long-term demand projections remain strong. The company's ability to bring in a partner like Rio Tinto - already familiar with the deposit and the extraction technology - could de-risk the project considerably.
The outcome of these negotiations will shape not only McEwen Copper's future but also Argentina's position in the global copper market. Los Azules is well positioned to become a key player, if the pieces fall into place.