Rio Tinto is considering increasing its 17.2% stake in McEwen Copper's Los Azules project in Argentina's San Juan province, according to two industry sources, as reported Reuters.

The project is said to be among the world's largest undeveloped copper projects, signalling Rio Tinto's intent to acquire large-scale copper assets amidst rising demand driven by data centres and the clean energy transition.

Owned through Nuton, its copper technology venture, Rio Tinto is assessing the economic potential of Los Azules and testing its proprietary leaching technology at the site, sources revealed.

The company's focus on organic growth follows unsuccessful merger discussions with Glencore.

Rio Tinto refrained to comment on the situation.

McEwen Copper managing director Michael Meding told Reuters: “We are obviously discussing with our existing partner Nuton because their technology makes so much sense.”

Meding added: “Now that Rio Tinto is building their ​copper pipeline, they basically have a mandate to add copper for their production profile. So we are ‌having ⁠fruitful conversations.”

The acquisition of a larger stake could enhance Rio Tinto's copper resources at a time when new findings are limited and competition for quality assets intensifies.

Nuton initially invested approximately $100m (£73.53m) to secure its stake in McEwen Copper, a unit of McEwen Mining.

A feasibility study estimates the project's after-tax net present value at $2.9bn, with first production anticipated by 2030.

In its initial five years, the mine aims to produce around 204,800t of copper cathode annually.

Besides Nuton, Stellantis holds an 18.3% stake in McEwen Copper. The automotive company invested around $275m to secure raw materials for electric vehicle batteries.

McEwen Copper seeks initial capital of approximately $4bn (C$5.47bn) for the mine's development and plans to launch a $300m initial public offering later this year.

Los Azules is situated in the Andes Mountains around 80km west-north-west of Calingasta and 6km from the Chilean border at an altitude of approximately 3,500m.