In a significant development that could reshape the global copper industry, mining giants Rio Tinto Group (LSE: RIO) (ASX: RIO) and First Quantum Minerals Ltd. (TSX: FM) have announced the completion of their joint venture to develop the La Granja project in Peru.
Located in the high-altitude region of Cajamarca, Northern Peru, the project is one of the world’s largest undeveloped copper deposits, boasting an impressive 4.32 billion tonnes at a 0.51 per cent copper concentration.
The joint venture comes at a time when the demand for copper is surging, particularly due to its critical role in renewable energy technologies and electric vehicles.
“Developing La Granja would provide a significant new supply of copper and further strengthen Rio Tinto’s portfolio of materials needed for the energy transition,” said Bold Baatar, Rio Tinto Copper Chief Executive.
First Quantum has acquired a 55 per cent stake in the project for $105 million and has committed to invest up to an additional $546 million for capital and operational costs. The project has also received regulatory approvals from the Government of Peru, a critical milestone that paves the way for its development.
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“As operator, we will leverage our core strengths in mine design, project development, and community engagement,” said Tristan Pascall, First Quantum Chief Executive Officer.
The deal is not just a win for the two companies but also promises to have broader economic and social implications. Rio Tinto initially acquired the project from the Government of Peru in 2006 and has since carried out extensive drilling programs and established partnerships with local communities.
“We appreciate the support from the Government of Peru for the completion of this transaction,” added Pascall.
With all regulatory hurdles cleared and a robust financial roadmap in place, the next steps for the joint venture involve completing a feasibility study. Both Rio Tinto and First Quantum are optimistic about the project’s future contributions to a greener global economy.
