McEwen sees copper investors resisting latest Argentina woes

Rob McEwen’s copper venture is pressing ahead with a major project in Argentina, betting a new legal and fiscal stability programme shields it from the latest spate of turmoil in the nation.

McEwen Copper Inc released a feasibility study for its Los Azules project in San Juan Province and is looking to go public early next year, with a possible Buenos Aires listing, Chief Executive Officer Michael Meding said.

Existing and prospective investors haven’t been put off by recent market turmoil in Argentina, Meding said in an interview Tuesday from Europe ahead of meetings with potential backers. 

President Javier Milei, a fiery right-wing populist, is battling a currency crisis ahead of key midterm elections while US Treasury Secretary Scott Bessent has pledged a financial lifeline to the crisis-prone nation. For mining companies that had largely shunned Argentina after decades of state intervention, Milei’s programme of tax, currency and trade benefits – known as RIGI – has provided a way to bulletproof capital commitments. 

“We believe in the future of Argentina,” Meding said. “It’s in a good spot geopolitically and has what the world needs.”

Soon after he spoke, McEwen Copper put out a feasibility study for Los Azules, including an initial capital estimate of US$3.2 billion and annual copper cathode production of 204,800 tonnes. The project’s RIGI application, listed as US$2.7 billion, was approved late last month.

Now the company is turning to an initial public offering, which could take place in Toronto or New York next quarter, Meding said. It’s also discussing a possible concurrent listing in Argentina. 

While McEwen had planned to float the copper unit’s shares this year, RIGI approval took longer than expected and management wanted to release the feasibility study beforehand, Meding said. Also, the company just signed an agreement with the World Bank’s private-sector investment arm.

McEwen Copper is speaking with existing holders, which include automaker Stellantis NV and a Rio Tinto Group venture, as well as prospective new investors as it seeks fresh funds, he said. 

In the feasibility statement, McEwen Copper said it had received preliminary finance proposals from firms including Komatsu Ltd. and Sandvik AB, as well as European export credit agencies, covering most of the major mechanical equipment and half of the local construction cost. 

Los Azules is slated to begin construction next year and churn out its first copper in 2030 when the wiring metal is projected to be in short supply.