Graphic: Red metal rising: Argentina sets lofty sights on global copper top 10

McEwen

08/05/2023 11:00

By Lucila Sigal
       BUENOS AIRES, May 8 (Reuters) - Argentina, known better
for its Malbec than its mining, has its sights set on becoming a
top ten copper producer by 2030, with an investor friendly
stance luring global players like Glencore  GLEN.L  and Lundin
Mining  LUN.TO  to its mountainous north.
    The South American country has a pipeline of copper projects
that could produce 793,000 tonnes a year by the end of the
decade, government forecasts show, well below neighboring No. 1
producer Chile but near big players like Australia and Zambia.
    While a lofty goal - Argentina produces no copper currently
after its last working mine closed in 2018 - it could position
the country as an important new supplier as demand globally for
the metal rises along a global electrification push.
    Leading the way is Lundin Mining's Josemaria project in
northern San Juan province, aiming to produce over 130,000
tonnes a year and that is a pre-construction phase.
    Behind that in the queue are Glencore's $4.5 billion El
Pachón; MARA, owned by Yamana Gold Inc  AUYN.MX , Glencore and
Newmont Corp  NEM.N ; First Quantum Minerals Ltd's  FM.TO  Taca
Taca and McEwen Mining's  MUX.TO  Los Azules.
    "With Pachón, Altar and Los Azules we can add immense
potential in terms of copper that the world is demanding for the
energy transformation that is already underway," said Carlos
Astudillo, mining minister of key copper province San Juan.
    
    BRIDGING THE DEMAND GAP
    San Juan is home to five of Argentina's eight main copper
projects that have a total capex of $22 billion, a recent
government report shows. Three more are in Mendoza, Catamarca
and Salta, all near the north-west Andean border with Chile.
    Josemaria, Astudillo told Reuters, had its environmental
impact statement approved; Los Azules had presented its impact
report, and El Pachón, a long-stalled mine, was moving towards
production with regional political support for the project.
    "(There's) incredible potential that could make the country
a key player in bridging the gap between current production and
future copper demand in the clean energy transition," said
Carolina Laumann, Josemaria's communications manager.
        The mine aims to finish an engineering review, key
permits and infrastructure deals this year, she said, and move
to a financing stage. Once construction starts it could be 4-5
years to production, she said. The target had been to produce in
2026.
  
        Argentina has an estimated 65 million tonnes of copper
reserves, according to a 2022 government report, some 3% of the
global total. That compares with world No. 2 producer Peru's 9%
share and distant leader Chile with almost a third.
  
    
    ELECTRIC VEHICLE DEMAND
        To be sure, Argentina is battling an economic crisis
with scarce foreign currency reserves, inflation over 100% and
tight capital controls which make business complex. But the need
for growth has added impetus to sectors such as mining and
energy.
  
    The country is already one of the world's top lithium
producers, and officials see mining as a strong potential
employer and future driver of exports, which could help the
indebted country bring in much-needed hard currency.
    Víctor Delbuono, a mining economist at the Fundar Foundation
that worked with the government on its latest mining report,
said Argentina had built up a strong copper project pipeline and
done well attracting investment in recent years.
    He added though that the country still needed to improve its
complex foreign exchange market and fine tune its tax system for
the sector to help ensure strong mining development up to 2030.
    Franco Mignacco, president of the Argentine Chamber of
Mining Entrepreneurs (CAEM), said the global electric vehicle
boom would be a key driver. Carmaker Stellantis  STLAM.MI  made
a $155 million investment earlier this year in Los Azules.
    "The projects we have are of global importance and relevance
because it's estimated that demand for copper between now and
2050 could be multiplied," he said. Copper demand is forecast to
double to 50 million tonnes by 2050 from 2020 levels.
    "The projects we have and many more will be needed."

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Argentina: Copper projects    https://tmsnrt.rs/424seh3
Argentina: Copper projects (Interactive graphic)    https://tmsnrt.rs/3ntGQHx
Argentina: Red metal rising?    https://tmsnrt.rs/3NF39EX
Argentina: Red metal rising? (Interactive graphic)    https://tmsnrt.rs/3LxpzXh
Argentina: top 10 for copper?    https://tmsnrt.rs/3Ax5t9p
Argentina: top 10 for copper? (Interactive graphic)    https://tmsnrt.rs/3LzSgTf
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 (Reporting by Lucila Sigal; Editing by Adam Jourdan and Louise
Heavens)
 ((adam.jourdan@thomsonreuters.com; +54 1155446882; Reuters
Messaging: adam.jourdan.thomsonreuters.com@reuters.net))