Los Azules presented the adhesion to the RIGI (Large Investment Incentive Regime) for US$227 million, which will allow McEwen Mining to move forward with the feasibility study to make a decision towards construction or FID (Final Investment Decision). Michael Meding, VP and General Manager of McEwen Copper, discusses the next steps, potential strategic alliances, and different scenarios for the copper project located in Calingasta. With the obtaining of the DIA (Environmental Impact Assessment Approval) last December for the construction and future operation of the project, Los Azules has the potential to begin construction in early 2026.
By Panorama Minero
1) Are there any timelines for the approval of the RIGI?
The authorities have already contacted us; it has been very positive because we have already had conversations where they informed us that they have reviewed our request for adhesion to the RIGI. In the coming weeks, they will invite us to present the project. For now, these are the timelines that can be shared.
2) With the benefits of the RIGI, does Los Azules rival any similar project in Chile or Peru?
We have conducted several analyses of the impact of the RIGI, which brings the tax burden to a level similar to what is observed in Chile, a country that is not the same as 20 or 30 years ago, when there was much more mining development and the tax burden was lower.
I believe it is important to think about fiscal stability for 30 years, which is crucial for making investment decisions or obtaining loans because they are long-term, and those lending the funds want to be sure they will be repaid, considering all the risks involved in mining, such as technical, construction, budgetary issues, metals market prices, geopolitics, among others.
The RIGI is a very good element to bring more confidence and competitiveness to Argentina.
3) Los Azules ranks in the Top 10 undeveloped copper projects globally. What would be the distinctive characteristic of this project?
I believe that, internationally, our differentiator is that we want to be a generative project, with a very low environmental footprint, and very low CO2 emissions; we plan for water consumption to be much lower than other comparable projects that include concentrators and mills.
We also have the aspect of wanting to provide a very different working environment for the workers, which is why we are developing a very unique camp. Once the project is operational, and in order to change the paradigm of mining—from creating a place where people will work—to a place where they can also be, recover in a green environment, something very attractive to workers.
Another differentiator is that we have a team made up of many people from San Juan who share their decades of experience in mining in the province, with a strong desire to see the project come to life. I also think this sets us apart because it allows for a different level of commitment and speed.
4) Could the project be further expanded beyond what is currently known?
We have been focused on making the project feasible, but in parallel, we are looking for new exploration targets, and we have identified some with good results. However, it is important to remember that Rio Tinto's involvement—and the processing through its technology company Nuton—has already considered extending the project's life in the Preliminary Economic Assessment (PEA) by about twelve years, from approximately 27 to 39 years.
Therefore, we are working on several fronts: one is the feasibility, another is finding ways to add more long-term value, and a third is how we can reduce the project's risk in terms of construction time, financing, and execution.
5) With partners like Rio Tinto and Stellantis, what are the next steps for Los Azules?
The next steps involve working on the feasibility and detailed engineering to the point where a construction decision can be made; this is also something that was presented as a project within the RIGI.
Over the past three years, we have financed US$453 million. The CAPEX – construction cost – for Los Azules is estimated at US$2.5 billion. Therefore, this year and the next, we will focus on advancing the project while also ensuring the appropriate financing.
6) You recently participated in a visit to Japan. What results were achieved? Can we think of any form of collaboration?
We visited Japan with two important goals: to evaluate potential equipment suppliers because we need a significant fleet of equipment that is not manufactured in Argentina, but in various parts of the world; and on the other hand, to analyze potential financing options, either for equipment purchases, off-take agreements, or possible additional investment opportunities from other strategic partners.
The Japanese are already partners in several mining projects, and we are interested in having these discussions to see if we can find any rapprochement.
We have also talked with the diplomatic corps to better understand Japan's relationship and interest in investments in Argentina. In the past, it was complicated and complex due to previous experiences, but now the investment climate is changing towards a more favorable environment for Japanese investments in Argentina.
7) How are community anxieties managed?
The project is moving forward at full speed, as always: what changes are the types of work, which means less manpower on the project, as we previously reported.
Our focus is on making the project feasible, with engineering, financing, and construction. Sometimes, it is complex to reconcile people's expectations with the reality of mining projects, which have different timelines: people have needs for today, and the mining project requires financing and work that cannot be done "overnight," no matter how fast one wants to move forward. And here, the role of journalism is very important because it allows us to publicly clarify our timelines, manage these expectations, and be transparent about the next steps to follow.
With the population of Calingasta and all other citizens of San Juan, from the company, we want to move the project forward as much as possible: the team is very committed, which allows us to move at a different speed. From my position, I can say that I am very pleased with the team for their commitment, experience, and conviction.
8) As a mining executive with experience in Argentina, what would be your message to the investor attending the upcoming PDAC convention in Toronto?
It is important for any investor to observe that the U.S. and Argentina share some similarities. In the case of the U.S., when investing in mining, it depends on the state in which the investment is made; and the same happens in Argentina, with provinces that have very clear mining development policies, with good projections for the future, like in the case of the San Juan province, which has been focused on mining for over 20 years. I think that is an important message.
The other message is to observe the existing options: in Argentina, there are investment opportunities, but the cycles of the economies must always be taken into account.
