Rio Tinto has inked a joint venture agreement to progress development of one of the world’s largest undeveloped copper deposits, the La Granja copper project in Peru.
Under the proposed transaction, First Quantum will acquire a 55% stake in the project for $105 million. It will also further invest up to $546 million into the JV for capital and operational costs.
The transaction is expected to be completed by the end of Q3 2023, subject to the satisfaction of regulatory approvals. As majority owner, First Quantum will then operate the La Granja project with initial work focused on completing the feasibility study.
Rio Tinto acquired the La Granja Project from the Peruvian government in 2006. Since that time, it has performed an extensive drilling program that significantly expanded the declared resource and understanding of the orebody, and established partnerships with host communities, local and national governments.
“La Granja is an exciting but complex project that has the potential to be a significant new source of the copper that is needed for the energy transition. We are pleased to enter into this agreement with First Quantum, that will bring our combined development capabilities and deep knowledge of La Granja to progress the project,” said Rio Tinto Copper chief executive Bold Baatar.
“This partnership underscores not only La Granja’s potential to be a significant copper producer, but Peru’s position as one of the world’s most important mining investment destinations. Developing La Granja would also further strengthen Rio Tinto’s copper portfolio following the acquisition of Turquoise Hill Resources and commencement of underground mining at Oyu Tolgoi in Mongolia.”
First Quantum CEO Tristan Pascall added that Rio Tinto’s work on La Granja has been extensive, and it shares its partner’s view that the project has the potential to be a Tier 1 copper mine.
Rio Tinto and First Quantum have also entered into a memorandum of understanding for strategic cooperation globally in copper and other base metals exploration and project development, as well as for sharing information and technical know-how around best-in-class mining, processing and decarbonisation.
La Granja, located at a high altitude in Cajamara, northern Peru, has the potential to be a large, long-life operation, with a published Indicated and Inferred mineral resource totaling 4.32 billion tonnes at 0.51% copper.