6 large copper projects in Argentina that could revive the industry

Six large-scale projects in Argentina could reach output of over 1.2Mt/y of copper before the next decade and lift an industry that has been paralyzed since 2018 after the closure of the Alumbrera mine in Catamarca province.

Adding to the El Pachón, Los Azules, Josemaría and Filo del Sol projects, which are currently in the advanced exploration stage in San Juan province, are Taca Taca in Salta province and Mara, which looks to take advantage of the Alumbrera infrastructure, bringing the total planned investment to close to US$20bn.

The companies behind the projects are looking to satisfy demand for copper stemming from the global energy transition. Demand will increase by more than 40% over the next two decades, according to the International Energy Agency.

Switzerland-based natural resources company Glencore, meanwhile, has warned of the imbalance between supply and demand due to the rise of electromobility, renewable energies, energy storage systems and electrical networks.

There will be "a cumulative gap between supply and demand of 50Mt between 2022 and 2030, which compares to current global demand for copper which is around 25Mt per year," Glencore CEO Gary Nagle was reported as saying.

Mining is one of Argentina's main export sectors and the country requires capital to overcome its complex macroeconomic situation with inflation close to 100% in recent months, and with GDP growth forecast at only 2% in 2023, warned the World Bank.

"The government is in a situation in which it cannot deny foreign investment or the entry of dollars generated by mining exports and will continue to generate the necessary incentives. However, this year investors and multinationals that already operate in Argentina will act with more caution," Marina Pera, Control Risks researcher for the Southern Cone, told BNamericas.

Just eight of the 20 copper projects in Argentina's mining portfolio could generate exports of US$11bn a year, sector authorities have said.

BNamericas reviews the six major projects that are all close to the border with Chile.

El Pachón

The project belongs to Glencore and investment is estimated at US$5.6bn for average production of 350,000t/y for 25 years.

This year, new exploration is planned, said project director Carlos D'Agnillo in a meeting with the governor of San Juan, Sergio Uñac, last August and Nagle said in December that he was open to adding a partner to accelerate the project.

Los Azules

The project of Canada's McEwen Mining considers an initial investment of US$2.4bn. Production would reach 186,000t/y of copper in the first 13 years of a 36-year mine life.

The concentrator plant will have a throughput rate of 80,000t/d in the first phase, which will increase to 120,000t/d in a second phase to begin after the fifth year of production.

McEwen is currently developing its second drilling campaign which will run through June. It expects to deliver the updated preliminary economic evaluation this quarter followed by an initial public listing later this half and a feasibility study in 2024.

Subsidiary McEwen Copper announced a new US$82mn investment in December, including US$25mn from Rio Tinto-owned copper leach technologies company Nuton and US$40mn from CEO Rob McEwen.

Josemaría

The Lundin Mining project involves estimated investment of US$4.06bn and production is put at 125,000t/y of copper in a 19-year operation.

In 4Q22, the Canadian company intended to invest around US$300mn in engineering and geotechnical works, long-term commitments, and construction of camps and roads, among others, Lundin said in its Q3 results report. 

Filo del Sol

The project of Vancouver-based Filo Mining straddles the border of Argentina’s San Juan province and Chile’s Atacama region. Average copper production is estimated at 67,000t/y over 14 years, for an investment of US$1.27bn.

Taca Taca

The project belongs to First Quantum Minerals. It involves investment of US$3.6bn and maximum production is put at 275,000t/y in a 32-year development. The Canadian company is in the process of obtaining operating permits, including for the use of power lines, water rights and road construction. However, in a November presentation the company said it would not make a final investment decision until 2024.

Mara (formerly Agua Rica)

The project is owned 56.25% by Toronto-based Yamana Gold and 43.75% by Glencore. However, Pan American Silver and Agnico Eagle Mines proposed last year to acquire all of Yamana Gold's outstanding common shares.

Mara considers an investment of US$2.39bn and could reach production of 241,000t/y for 28 years.