(Kitco News) - There is a significant upswing coming in the commodity cycle that will be driven by geopolitical tensions and underinvestment in the mining sector, according to McEwen Mining's Executive Chair and Chief Owner, Rob McEwen.
"Right now, we're at the bottom of the cycle, and it's ascending," McEwen told Kitco Mining on the sidelines of the 2025 Mines and Money conference. He emphasized that commodities are at a 10-12 year low relative to financial assets, suggesting substantial room for growth.
McEwen highlighted geopolitical tensions as a primary driver, noting a shift in sourcing strategies. "Customers [are] looking for where they source the material, and that's changed significantly with the geopolitical tensions," he said.
He also pointed out the impact of underinvestment in the sector, leading to a lag in production relative to projected demand.
Los Azules project and sustainable mining
McEwen Mining is taking a radically different approach to the development of its Los Azules project in Argentina. The company is targeting a more sustainable project, including architecture-designed accommodation blocks that could later on become a hotel in post-mine use. This includes renewable energy, renewable water sources, [and] food production systems.
"What we're looking to do is create a jewel on the side of a mountain, rather than a scar," McEwen explained.
The Los Azules project could see its net present value increase by a third if accepted into the RIGI regime (the Incentive Regime for Large Investments). "For us, it would be an increase in our net present value by a third. So we'd move from $2.9 to $3.8 billion," McEwen stated.
He noted that the RIGI regime includes a reduction in the tax rate, the removal of foreign controls, [and] a 30-year stability agreement on tax.
McEwen is also advocating for a shift in how mining companies attract investors, suggesting the industry borrow strategies from the technology sector.
He criticized the practice of hedging among gold companies, stating, "Your words and your actions don't match." He also questioned why more gold mining companies don't hold gold on their balance sheets.
He observed the lack of enthusiasm and youthful presence in the mining sector compared to the tech industry. "You don't see a lot of young people here," McEwen noted, advocating for more visual displays and technology at mining conferences.
Special thanks to our sponsor, Goldshore Resources, for making this coverage possible. Visit https://goldshoreresources.com/ to learn more.
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