McEwen Copper's ambitious $2.7bn Los Azules copper project has received approval to participate in Argentina's Large Investment Incentive Regime (RIGI), clearing the path for what could become the country's first high-purity copper cathode producer since mining operations ceased in 2018.

Economy Minister Luis Caputo announced the approval on September 26 with a post on X, confirming Los Azules as the first copper mining project to secure RIGI benefits in San Juan province. The project, controlled by Canadian miner McEwen Inc., represents the eighth project approved under the RIGI, bringing total investments under the programme to $15.7bn.

The approval comes as global copper markets face mounting supply pressures. Industry analysts forecast a supply deficit of 300,000-500,000 metric tonnes by the end of 2025, with demand driven by infrastructure development, electrification projects, and the expanding digital economy.

When bne Intellinews interviewed Michael Meding, McEwen Copper's vice-president, in April, he emphasised the project's strategic importance: "The capital-intensive sector relying on large international investment in Argentina needed an incentive regime like RIGI," he said. "For construction financing, RIGI is absolutely required because the amounts involved in mining projects are substantial, and investors need legal stability."

That stability has now materialised. The RIGI approval grants Los Azules 30-year legal, fiscal and customs stability, including a reduced corporate tax rate of 25% (down from 35%), halved dividend withholding taxes, and streamlined foreign exchange procedures.

Los Azules is set to become the first project in Argentina's mining history to produce high-purity copper cathodes, ready for direct industrial use, positioning the country to bypass traditional concentrate exports that require overseas refining.

The timing is particularly astute given Argentina's copper production drought. The country has not produced copper since the Alumbrera mine closed in 2018, despite sitting atop some of the world's largest undeveloped deposits. Los Azules, ranked as the 9th largest undeveloped copper deposit globally, could help fill that void whilst capitalising on soaring global demand.

Production is slated to commence by 2029, with initial capacity targeting 175,000 metric tonnes annually. The project is projected to generate more than $30bn in export revenues over its 27-year mine life, based on the company's 2023 preliminary economic assessment.

The project's credibility received a significant boost earlier this week when the International Finance Corporation (IFC) signed a collaboration agreement with McEwen Copper. The World Bank Group member will help align Los Azules with international environmental, social and governance standards—a critical step for securing project financing.

"This IFC collaboration is a game-changer for Los Azules," said Rob McEwen, chairman and chief owner of McEwen Inc. "It will help us align with top-tier sustainability standards whilst paving the way for IFC as a potential lead lender and equity partner."

The project already boasts strategic partnerships with European carmaker Stellantis (18.3% stake) and mining giant Rio Tinto through its Nuton subsidiary (17.2% stake), alongside McEwen's controlling 46.4% interest.

McEwen Copper is positioning Los Azules as a "green copper" producer, leveraging innovative leaching technology that consumes five-sixths less water than traditional flotation methods. The project targets carbon neutrality by 2038 and will operate entirely on renewable electricity.

This environmental focus could prove commercially valuable. As supply chains face increasing scrutiny over sustainability credentials, premium pricing for responsibly-sourced copper is becoming more prevalent. During our April interview, Meding noted: "We believe that having a low water and CO2 footprint is important and can be a future competitive advantage."

The next barrier remains substantial: securing financing for what Meding estimates will total $2.7-3bn in development costs. The company has raised $453mn over the past three years but requires an additional $227mn to reach final investment decision, followed by approximately $2.5bn in construction capital.

The feasibility study, due by October's end, will provide updated project economics and operational details. With environmental permits already secured in December 2024 and RIGI approval now confirmed, Los Azules appears well placed to begin detailed engineering and financing discussions.

Despite the positive momentum, political uncertainties linger. Argentina's midterm congressional elections this October will test President Javier Milei's market-friendly agenda after a crushing defeat in Buenos Aires province earlier this month, whilst the 2027 presidential race could potentially alter mining policies.

However, Meding expressed confidence during our April conversation: "During the last elections, all presidential candidates saw mining as the growth engine for Argentina's economic future—something very different from past electoral cycles."

The Los Azules approval reflects broader mining industry trends. Global refined copper demand hit nearly 27mn tonnes in 2024 and is projected to reach 33mn tonnes by 2035, driven primarily by EV transition and digital infrastructure expansion.

Over half of global copper reserves are located in just five countries, whilst China dominates processing with 60% of global ore imports and 45% of refined copper production. Argentina's re-entry into copper production could help diversify global supply chains at a critical juncture.

Copper prices have remained volatile throughout 2025, trading between $9,000-10,500 per metric tonne. Multiple industry observers project prices will rise significantly versus 2024 levels as supply constraints persist alongside robust demand growth.

For Los Azules, current market dynamics appear favourable. The project's preliminary assessment used $3.75 per pound copper pricing, though Meding indicated the forthcoming feasibility study would likely employ higher assumptions.

With RIGI approval secured and international backing materialising, McEwen Copper has cleared significant regulatory hurdles. The company now faces the critical challenge of assembling financing for one of Latin America's most pivotal copper developments—a task that could determine whether Argentina successfully rejoins the global copper supply chain just as the world needs it most.