Glencore Plc is moving closer to building a major copper project in Argentina, a move that would reverse a longstanding aversion to developing big new copper mines.
Glencore's El Pachon mine has recently seen an increase in activity and has been hiring new staff, according to people familiar with the matter. The people asked not to be identified because the information is confidential. There is an expectation within the company that it is working on the mine, but it remains uncertain whether it will go ahead, the people said.
Glencore has grown over the years by acquiring businesses and expanding existing mines, while rivals have spent billions of dollars, often disastrously, on new developments. Long-time chief executive Ivan Glasenberg has often been an outspoken critic of the industry's tendency to add too much supply that can cause prices to collapse, while his successor Gary Nagle said as recently as last year that he and Ivan "came from the same school" when it came to new-build projects.
Yet the outlook for copper is so strong that even Glencore is softening its stance. Copper is at the heart of global efforts to decarbonise and there are growing concerns about future shortages as demand is expected to outstrip supply.
Glencore's progress on El Pachon comes amid a broader shift 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 recently completed a new copper mine in Peru, while BHP Group and Rio Tinto Group are making multibillion-dollar deals to add to their copper portfolios.
Still, Glencore could not guarantee it would go ahead with the mine, the people said. Among other considerations, the company needs to see regulatory certainty and 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 Pachon is located in the province of SAN Juan, between 3,600 and 4,200 meters above sea level, about 5 kilometers from the Chilean border. The project has the potential to become a major copper producer, with some early forecasts suggesting it could produce around 400,000 tonnes a year.
A decision to develop the mine would also give a big boost to Argentina's copper ambitions as the country seeks to attract investment to help shore up state finances and create jobs.
