Rio Tinto Group (ASX: RIO) (NYSE: RIO) (LON: RIO) and Chile’s state-run copper giant, Corporación Nacional del Cobre de Chile (Codelco), have formed a joint venture project to explore Codelco’s properties in the Atacama region of Chile.
Rio Tinto announced the joint venture on Wednesday shortly after closing its acquisition of 57 per cent of PanAmerican Silver Corp’s (NYSE: PAAS) (TSX: PAAS) operating stake and net smelter royalties in Agua de la Falda for USD$45 million.
On Wednesday, Rio Tinto’s CEO Jakob Stausholm met in Tokyo with Codelco chairman Maximo Pacheco to formalize the new venture Nuevo Cobre (New Copper).
“Chile is one of the most important sources of the copper and other critical minerals the world needs to deliver the energy transition and achieve net zero,” said Stausholm.
“With this partnership, we are bringing together our complementary experience and capabilities. Codelco’s local knowledge and expertise is second to none and we have a global track record in exploration.”
Rio Tinto exploration’s analysis indicates that Agua de la Falda holds potential for new copper discoveries. The joint venture will now shift its focus to exploring this potential.
The partnership builds upon a collaboration agreement that the two companies signed October of last year. This agreement aims to encourage innovations and technology that improve safety, productivity, and environmental, social, and governance (ESG) outcomes in underground mining.
“This is an unbeatable opportunity for Codelco and Rio Tinto to join our knowledge, experience, strengths and capabilities to accelerate exploration and development of these assets to contribute the copper that the world needs for its energy transition,” said Pacheco.
“We are very pleased to formalize this partnership with Rio Tinto and acknowledge our mutual commitment to following the best standards of health, safety, community relations and care for the environment.”
Copper market recovering from pandemic
According to a report from Fortune Business Insights, the global copper mining market size was valued at USD$8.44 billion in 2022 and is projected to grow from USD$8.87 billion in 2023 to USD$11.17 billion by 2030.
The COVID-19 pandemic caused significant disruption in the copper markets, and ongoing mining projects also saw delays due to government regulations. New infrastructure, such as 5G networks and power stations for electric vehicles were postponed due to COVID-19. Copper demand also declined due to the stoppage of business activity, which slowed copper mining growth.
In the years since, however, copper demand has been increasing because of the global shift to clean energy, growing urbanization, industrialization in emerging economies, and technology advancements like 5G and IoT, which all rely on copper for various applications.
Nevertheless, against this backdrop, Rio Tinto and Codelco’s joint venture, Nuevo Cobre, represents a forward-looking collaboration poised to harness the increasing copper demand driven by clean energy and technological advancements.