McEwen calls for shift in mining milieu
- 2 March 2025
Mining tends to look like an old movie, says Rob McEwen. Think Lawrence of Arabia. It needs to look more like Avatar or maybe Dune, sans the negative environmental messaging. The industry must present a more positive message about its future, the veteran mining investor said on the sidelines of Mines and Money Miami in Florida, USA.
McEwen Mining’s executive chair and lead shareholder wants to build a large, modern copper mine in Argentina, where he feels the investment environment has improved under bold but erratic president, Javier Milei. McEwen says the industry needs to boost its appeal to younger people and communities generally, to bring in new talent and to win on-the-ground support for projects. Otherwise higher metal prices won’t be enough to bring forward development of critical new capacity.
The reference to David Lean’s 1962 classic was McEwen’s way of talking about mining’s very long gestation timelines – decades – versus the shiny new industries turning out game-changing products and ideas in months. “What’s exciting about mining? Sometimes it’s like watching paint dry. The timelines [are] longer and the potential growth prospects aren’t as big. How do you show the growth that's occurring right now? Maybe we need more visual displays [with] more technology … I can see a day when we’re going to be using more robots and autonomous vehicles. But we probably need more graphical depiction of that.
“If you look around a tech conference at the audience you’ll see a lot of young people. You don't see a lot of young people here. There's just a [different] level of enthusiasm.”
McEwen Mining last month applied to qualify for a range of tax benefits under Argentina’s Regimen de Incentivo para Grandes Inversiones (RIGI), or Promotional Regime for Large Investment, for its proposed US$2.7 billion Los Azules copper project in San Juan. It is meanwhile advancing work on a definitive feasibility study, having outlined a circa-27-year project producing up to 175,000 tonnes of copper at C1 costs around US$1.07/lb in a 2023 preliminary economic assessment. The PEA also outlined McEwen’s vision for the world’s “first regenerative copper mine”, using renewable power, 25% of the water used by comparable copper operations, heap leaching, onsite production of copper cathode and no tailings.
McEwen has a direct 12.7% stake in Los Azules (and 16% of McEwen Mining), with McEwen Mining owning 46.4%, automaker Stellantis 18.3% and Rio Tinto unit Nuton 17.2%.
Why was the “regenerative” plan on the table and would Los Azules make money? McEwen said he was often asked by C-suite peers: what’s it going to cost?
“It goes back to the reputation of mining,” he said. “The general public views it as a very negative industry for the environment. It's been unattractive and you can see it in the number of students entering schools of geology [and] mine engineering. They're very, very low. So you want to attract talent and the talent pool is shrinking. But even more than that you want the communities that are nearby … to look at something and say, I’m proud of that. It's environmentally sensitive. It's comfortable to work in. It's attractive to look at.
“What we’re looking to do is create a jewel on the side of a mountain rather than a scar. We are going to dig a hole there. But after the closure there are multiple uses that we’re planning for this operation.
“How much more is it going to cost? Well, what is the cost of having the privilege of being able to build your mine? Let's call it social license. If you spend hundreds of millions of dollars exploring and getting to the point where you want to build a mine and the community says, stop ... Can you avoid that by making this earlier expenditure to make the project more acceptable to the community?
“We’re fortunate that it is projected to be a low-cost operation, producing copper at just over $1 a pound. There’s about a 75% gross margin. So yes, we'll make money.”
McEwen said at the Resourcing Tomorrow conference in London in December last year Milei’s well-documented economic and political reforms could be just the start of a new trajectory for the country.
“Chile and Peru produce 40% of the world's copper,” he said. “Argentina has been effectively closed for quite a while for large-scale mining development and it's been a bit of a pariah in the investment community.
“That’s changed with the election of president Milei. He’s a man after my own heart. He’s a libertarian. He campaigned with a chainsaw, [saying], I’m going to cut out the bureaucracy. He was not viewed as a real contender for president but he got elected. His legislation that he’s introduced ... is all about attracting large-scale foreign capital. He’s reduced the tax rates, corporate tax rates, dividend rates, export taxes, and cleaned out a lot of the impediments to foreign investment and made it that if you have an argument with the government, you can have that settled in a foreign jurisdiction, which is a huge plus.”
McEwen said in Miami the Los Azules DFS would incorporate RIGI and non-RIGI economic scenarios.
“You have to apply for RIGI, and then you have to be accepted. If we’re accepted by the time we get our feasibility out it'll be included,” he said.
“For us [acceptance would mean] an increase in our net present value by a third. So we move from $2.9 to $3.8 billion.
“It’s very positive.
“You saw right after it was announced that BHP came in, did a deal with Lundin for $4.5 billion. Rio Tinto stepped in with a $6.7 billion investment in lithium [acquisition of Arcadium Lithium].
“It’s serving its purpose to draw capital to the country.”
