Stellantis, Rio Tinto raise bets on copper mining in Argentina

Automaker Stellantis NV and miner Rio Tinto Group are upping their investments in a giant copper deposit in Argentina as the race for metals used in electric vehicles heats up.

Stellantis, the maker of Peugeot cars and Jeep sports utility vehicles, is investing 42 billion Argentine pesos (US$120 million) to raise its stake in closely held McEwen Copper Inc to 19.4 percent, the latter said in a statement Wednesday. Rio Tinto venture Nuton will spend US$10 million to boost its holdings in the firm run by mining entrepreneur Rob McEwen to 14.5 percent.

The investments, which value McEwen Copper at about US$800 million, will go toward advancing the company’s Los Azules project in San Juan Province after more welcoming policies rekindled interest in Argentina’s vast deposits despite the nation’s economic woes and capital and currency controls.

The fresh funds give McEwen Copper more breathing space before going public. The firm will continue to evaluate the ideal timing for an initial public offering, chief Michael Meding said in a text message. It hopes to publish a feasibility study early 2025 and start producing copper toward the end of the decade.

For Stellantis, it’s a sign of how keen car companies are to lock in future supplies of the materials needed to move away from fossil fuels. Still, Goldman Sachs Group Inc analysts warned earlier this year that moves by automakers into the mining space may end badly, saying they’d be better off sticking to their core competencies and reducing their exposure to commodity price swings through hedging.

The investment comes less than two weeks before a pivotal presidential election in Argentina in which opposition candidates Javier Milei and Patricia Bullrich promise to deregulate the heavily controlled economy.