Last week, we learned that Rio Tinto (NYSE: RIO) is considering increasing its stake in the Los Azules copper project in Argentina.

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The project is controlled by McEwen, Inc. (NYSE: MUX) through its McEwen Copper subsidiary and is considered one of the world’s largest undeveloped copper deposits. 

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Rio Tinto currently owns a 17.2% stake in McEwen Copper through its Nuton venture, which focuses on copper leaching technology. The company is reportedly evaluating the project’s economics while simultaneously testing Nuton’s proprietary processing technology at the site.

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The move comes as major mining companies continue aggressively pursuing large-scale copper assets amid rising long-term demand tied to electrification, data centers, electric vehicles, and grid infrastructure expansion.

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Los Azules is located in Argentina’s San Juan province and is expected to begin production around 2030. According to Reuters, the project carries an estimated after-tax net present value of approximately $2.9 billion. It’s expected to produce roughly 204,800 metric tons of copper cathode annually during its first five years of operation.

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This won’t be cheap

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Developing the mine won’t be cheap.

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McEwen is reportedly seeking approximately $4 billion in development capital and is also planning a potential $300 million IPO later this year.

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Several strategic investors have already entered the project. 

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Carmaker Stellantis (NYSE: STLA)  previously invested $275 million in McEwen Copper and currently owns roughly 18.3% of the company as automakers continue securing long-term copper supply chains for electric vehicle production.

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Argentina itself is becoming increasingly important in the global copper market.

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The country recently projected that copper exports could reach more than $20 billion annually within the next decade as major projects such as Los Azules, Vicuna, and other undeveloped deposits move closer toward production.

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For Rio Tinto, increasing exposure to Los Azules would further expand the company’s long-term copper pipeline after failed merger discussions with Glencore (OTCBB: GLNCY) earlier this year.

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