Obituary: Lukas Lundin, Ex-Chairman Lundin Mining 1958-2022

A mining magnate who spent decades and billions of dollars reshaping mining in Latin America and made investors rich in the process…

A mining magnate who spent decades and billions of dollars reshaping mining in Latin America and made investors rich in the process…

Compliance officers insist that past performance is no indicator of future results. Well, say that to long-time Lundin Group investors. Lundin Energy netted a 2,800% return for investors when its oil and gas business was acquired for $14billion earlier this year. Likewise, Filo Mining’s share price rose more than 1,000% after a major copper-gold discovery in Argentina. The Lundin family-controlled group of companies, which was founded by Adolf Lundin in 1970s, has built up a steady following of loyal investors. It enjoyed a string of successes under Lukas Lundin’s leadership to the point that even other mining executives referred to his “Midas touch”.

Adolf Lundin started what is now a $30billion group of companies from scratch. From an early age he made it clear to Lukas and his brother Ian that their future lay in expanding the company. He sat both boys down before they were teenagers and, after a brief chat, they decided that Ian would handle the petroleum business while Lukas focused on mining. By the time Lukas entered New Mexico Tech, the family wealth was considerable, but he was made to learn his trade the hard way. He spent his student summers staking mining claims in the Ontario wilderness and was one of only a few New Mexico Tech students to graduate in Petroleum Engineering in just four years.

Adolf had incredible faith in his sons and sent the newly-graduated Lukas to Dubai to handle international operations for the International Petroleum Corporation (IPC). “We made a lot of mistakes, but we learned a lot of things through those experiences”, recalled Lukas years later. “The first ten years were quite painful because the learning curve was quite steep but from all those mistakes, we learned what to do right. That was a very beneficial school but probably very expensive for my father.”

But for LatAm INVESTOR readers, the most exciting part of the Lukas Lundin story begins in 1991, when he stumbled across an Argentine mining project. “My first real break came when I came to Vancouver in the mining business”, said Lukas, “and I picked up this big deposit, Bajo de la Alumbrera, in 1991, with the big porphyry system up in the Andes in Argentina… At that time, I didn't know very much about mining. I didn’t know what a porphyry was!”

Lukas steered the project through development, turning it into one of Argentina’s most important mines before selling it for $500million in 1995. That was followed by another Argentine success, with the discovery of the Veladero gold deposit that was sold for $300million in 1999. Those discoveries marked Lukas’s arrival as a serious player in the mining industry. But, more importantly, they generated huge amounts of employment and tax revenues for Argentina in the years following its financial collapse in 2001. The success of those two projects is often quoted today by pro-business Argentines, as they battle to develop the country’s next generation of mines in the wake of yet another crisis.

Lukas Lundin became Chairman of Lundin Mining in 1997 and under his leadership created a string of mining companies with assets across the globe. One brave and significant deal was a copper and cobalt mine acquisition in the Democratic Republic of Congo, that was eventually sold for $1.8billion. But it was in Latin America that he continued to have the most impact. In December 2014 Lundin Gold bought Fruta del Norte (FDN), a world-class gold deposit in Ecuador. It was a bold move as Ecuador had never managed to build a large-scale mine and the departure of FDN’s previous owner, Kinross, suggested that mining under then president, the firebrand socialist Rafael Correa, was impossible.

Lukas met with Correa and the two struck a deal for the mine. “These so-called ‘scary’ governments can often be very good to deal with”, he told LatAm INVESTOR in a 2021 interview. “It sounds crazy but these types of pragmatic, win-win deals sometimes work better with a populist government than a technocratic, pro-business one.” Incredibly little Lundin Gold did what Kinross, one of the world’s largest goldminers, couldn’t and FDN began operating in 2019. It was Ecuador’s first modern, responsible gold mine and helped bring in much-needed revenue during the pandemic when the price of oil – the country’s main export – collapsed. Investors in Lundin Gold have more than doubled their money while wages in the local area of Zamora Chinchipe are now far higher than the national average.

We interviewed Lukas Lundin in 2021. He was a tough interviewee, who used his words sparingly and gave short shrift to poorly-conceived questions. But he was also generous with his time, given that he was terminally ill, and willing to speak on-the-record without the public relations advisors that powerful businesspeople usually hide behind.

With Lukas’s death, the next generation of Lundins - his sons Jack, Adam, Will and Harry - will assume more control. Will and Harry have positions in IPC, while Jack is developing a gold project in Guatemala and Adam is overseeing a huge copper development in Argentina. They aren’t easy jurisdictions but the long-suffering people of both those countries will hope the sons have inherited their father’s ability to create work and wealth.

Lukas Lundin was born on the 3rd of July 1958 and died of brain cancer on the 26th of July 2022.

With thanks to source material from New Mexico Tech