Glencore Plc is moving closer to building a giant copper project in Argentina in a move that would reverse a long-held aversion to developing big new mines.
Activity has recently increased at Glencore’s El Pachón copper deposit and it has been making new hires, according to people familiar with the matter, who asked not to be identified because the information is private. There is an expectation inside the company that it is moving toward building the mine, the people said, although there is still no certainty it will proceed.
Glencore has grown over the years by buying operations and expanding its existing mines while its rivals poured billions – often disastrously – into new developments. Longtime boss Ivan Glasenberg was a regular and outspoken critic of the industry’s tendency to add too much supply that can lead to a crash in prices, while his replacement, Gary Nagle, as recently as last year said he came “from the same school as Ivan” when it came to new-build projects.
However, the outlook for copper is so strong that even Glencore is softening its position. Copper is central to the world’s efforts to decarbonise, and there are mounting concerns about future shortages as demand is expected to outstrip supply.
Glencore’s progress at El Pachón also comes amid a wider pivot in the mining industry. After years of cost cutting and shying away from big new projects, growth is back on the agenda. Anglo American PLC has recently commissioned a new copper mine in Peru, while BHP Group and Rio Tinto Group are in the midst of billion-dollar deals to grow their copper portfolios.
Still, there is no guarantee that Glencore will go ahead with the mine, the people said. The company will need to see regulatory certainty, among other considerations, as well as navigating Argentina’s controls on capital and foreign exchange. Previous plans to develop the asset have come to nothing.
A Glencore spokesman declined to comment.
El Pachón is between 3,600 and 4,200 meters above sea level in the province of San Juan, about five kilometres from the Chilean border. The project has the potential to be a major copper producer, with some earlier forecasts saying it could yield around 400,000 tons a year.
A decision to develop the mine would also be a significant boost to Argentina’s copper ambitions, as the country seeks to attract investment to help shore up state finances and generate jobs.
by Thomas Biesheuvel & James Attwood, Bloomberg