Stellantis and Rio Tinto Invest in Argentina's Copper Sector

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Stellantis (NYSE:STLA) (Hoofddorf, Netherlands) and Rio Tinto Group (London, England) seek to increase their involvement in Argentina by acquiring companies operating domestically.

Stellantis and Rio Tinto have bought shares in McEwen Copper, a subsidiary of McEwen Mining (NYSE:MUX) (Toronto, Canada), which owns the Los Azules copper project, one of the world's largest undeveloped mines.

According to a company statement, Stellantis has invested 42 billion Argentine pesos (about US$120 million) in McEwen Copper to increase its ownership to 19.4%. In February, the company also invested some 30 billion Argentine pesos (about US$8.5 million) to acquire shares in McEwen Copper.

Meanwhile, Rio Tinto has invested US$6 million in McEwen Mining and US$4 million in McEwen Copper and now will have 14.5% ownership in the latter.

The proceeds of these operations will be used to develop the Los Azules mine, ranked as one of the world's top 10 largest undeveloped copper deposits. The mine has estimated copper resources of 10.9 billion pounds at a grade of 0.40% and an extra 26.7 billion pounds at a grade of 0.31%. The asset is located in the San Juan province, near the border with Chile, and it is expected to have a life of 27 years.

McEwen has so far conducted two drilling campaigns at Los Azules in 2022 and 2023 with 192 holes. More drilling at the asset is expected to take place in order to evaluate the potential to expand the deposit, according to the company.

The mine is projected to have an annual production of 322 million pounds of copper cathode with a startup date by late 2028 or early 2029.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a list of projects related to the Los Azules mine.

The news on copper investments follows Stellantis' acquisition of 19.9% of shares in Argentina Litio y Energia (ALE), a company with lithium projects in the South American country. Besides acquiring shares, the company also closed deals on lithium purchases from ALE for a period of seven years with the possibility of extension.

Stellantis is a leading automaker, and its investments in Argentina's lithium and copper industry are likely related to its car manufacturing line, especially its electric vehicles.

Lithium is a metal used for the construction of electric car batteries. These cars, however, require some 80 kilograms of copper, or about four times more than a combustion vehicle, making Stellantis' access to direct production important.

According to a report by the Argentine mining ministry, the country has one copper mine in construction, another four in the feasibility and pre-feasibility phases, two in the preliminary economic assessment phase, and another 13 in advanced exploration.

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