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ECONOMY | 06-05-2024 14:57

Argentina power supplier Central Puerto eyes stake in McEwen’s copper project

Central Puerto SA, Argentina’s biggest power supplier, is in talks to invest in Canadian miner McEwen Copper Inc’s Los Azules project.

Central Puerto SA, Argentina’s biggest power supplier, is in talks to invest in Canadian miner McEwen Copper Inc’s Los Azules project, according to people familiar with the matter.

After recently signing a deal for a stake in the Diablillos silver-gold project in Salta Province, Central Puerto is committed to getting involved in a second mining venture, according to one person, who like others didn’t want to be named discussing private negotiations.

The company is eyeing Los Azules as well as other gold and silver sites. 

Los Azules, in San Juan Province, is one of several Argentine copper projects in different stages of development that could turn the country into a major supplier of the wiring metal in a decade. McEwen wants to start construction of its open pit in 2026, but first it is seeking a capital injection of US$130 million to keep exploration work on track.

Billionaire Eduardo Eurnekian’s group, Corporación América SA, has also been looking at Los Azules, according to people familiar.

Central Puerto produced 15 percent of all of Argentina’s electricity last year, more than any other company, according to its annual report. It continues to spend on new power plants, but has also been diversifying its commodities portfolio with investments in forestry and, now, mining. About 27 percent of the company is owned by a handful of wealthy Argentines — Guillermo Pablo Reca and Eduardo José Escasany, from the banking industry, and the Miguens Bemberg family led by Carlos Jose Miguens, who already has mining interests. 

The power supplier’s incursion into mining comes amid a broader push by local outfits. Recent investment activity by Argentines includes real-estate mogul Eduardo Elsztain’s purchase last month of a stake in a gold project; José Luis Manzano’s winning offer to revive a former Vale SA potash site, a tender in which Corporación América also bid; and moves into lithium by three national oil drillers.

Argentina shares vast mineral resources in the Andes with Chile, the world’s biggest copper exporter. But a mix of unpredictable politics and environmental opposition has prevented Argentina from unearthing many resources on its side of the mountains.

President Javier Milei, who took office in December on a platform to open up business, is seeking legislative approval for tax, currency and customs benefits for big, long-term investments like mining projects. Milei also wanted to scale back protections for glaciers, which impede some exploration in the Andes, but scrapped the plans as part of a bid to make his aggressive reforms more palatable.

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