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Exclusive-Lundin in talks with Japanese trading houses to develop Argentina mine -CEO

Divya Rajagopal
Updated ·2 min read
FILE PHOTO: A man passes the Lundin Group mining company booth during the PDAC convention in Toronto

By Divya Rajagopal

TORONTO (Reuters) -Canadian-Swedish miner Lundin Mining is in talks with Japanese trading houses and large miners to offer a stake of between 40% and 50% in Argentina's Josemaria mine, incoming CEO Jack Lundin told Reuters in an interview on Thursday.

In his first interview since being named as CEO this week, Jack Lundin said the company is conducting risk analysis before finalizing strategic partners to help develop the Josemaria copper-gold mine. He said an announcement is expected next year. Lundin starts his new role in January 2024.

The company has previously said it would cost about $3.1 billion to develop the mine.

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"We would like to come to the market with a plan for executing the development of the project which will likely entail partnership in order to help us dilute risk and carry support with capital, technical and political support," Lundin said. Adding that the company is open to negotiations.

Copper miners have been under stress as a tepid demand in China and macro economic uncertainty has put the commodity price under pressure, with the industry anticipating possible production cuts. Analysts are expecting that the low price could force copper miners to cut costs and even consider M&A deals.

"We are for now comfortable with our liquidity position and would consider financing options for specific projects," Lundin said.

Analysts at RBC capital markets said in Q2 Lundin's debt increased by 47% from Q1 to C$ 415 million.

Lundin's shares were up 4% on the Toronto Stock Exchange on Thursday.

The company is also watching the downward trend in copper prices and anticipates that if the prices fall below $3.60 per pound it could force some miners to cut production. Though Lundin is not planning to halt its production "at the moment", Lundin said.

"We are looking at bringing down costs...and really trying to weather the storm that we are in."

(Reporting by Divya RajagopalEditing by Denny Thomas, Chizu Nomiyama and Jane Merriman)