McEwen Copper, a subsidiary of McEwen Mining (NYSE:MUX), seeks $2.5 billion to advance the Los Azules copper project in Argentina. The prospective project wants to become a world-class copper mine with an anticipated annual production of 175,000 metric tons.

“We have invested more than $400 million to date, and now we are looking for $2.5 billion for capex,” Vice President Michael Meding told Reuters. The project in San Juan province is waiting for a key environmental permit by the end of 2024, with construction slated to begin by late 2025.

Los Azules ranks among the top 10 largest undeveloped copper deposits globally, with 10.9 billion pounds of indicated resources and an additional 26.7 billion inferred. Current copper prices ($4.09 per pound) put the worth of indicated resources at over $44.5 billion.

However, as the global copper supply deficit could reach as high as 4 million metric tons by 2035, these prices could be much higher. Meanwhile, copper extraction costs are worth noting, which, for an industry leader, Freeport McMoRan, equaled $1.61 per pound in 2023.

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Chairman Rob McEwen has taken steps to solidify local and international support for the project. In a recent interview for Benzinga, he mentioned visiting Argentina and discussing opportunities with President Javier Milei.

Milei took office a year ago and is trying to revitalize the country's mining sector, as its only operating copper mine closed in 2018. So far, Los Azules has attracted substantial backing, including a $35 million investment from Rio Tinto venture Nuton during the latest funding round in October. Nuton now holds a 17.2% stake in McEwen Copper.

McEwen highlighted automaker Stellantis (NYSE:STLA) as another key investor. The copper shortage risk prompted companies to seek security for materials essential for EV production, renewable energy systems, and grid infrastructure. Following green trends, the mine will rely on 100% renewable energy provided by Argentina's YPF Luz.

As one of the largest undeveloped deposits, Los Azules could become a cornerstone for addressing the global copper supply gap. With copper demand forecasted to grow over 50% by 2035, there should be plenty of interest in this capital raise.

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