Rio Tinto and First Quantum Minerals have agreed to form a joint venture (JV) to unlock the development potential of the La Granja copper project in Peru.
One of the largest undeveloped copper deposits in the world, La Granja has the potential to be a large and life-long operation with an inferred mineral resource of 4.32 billion tonnes of copper.
Under the JV, First Quantum will acquire a 55 per cent take for $105 million, and will commit to a further investment of up to $546 million.
The transaction is expected to be completed by the end of the third quarter of 2023.
“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,” Rio Tinto copper chief executive Bold Baatar said.
“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.
“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.”
Rio Tinto has been on the hunt for more copper assets after formally completing its acquisition of Turquoise Hill Resources in December 2022.
“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,” Baatar said.
First Quantum chief executive officer Tristan Pascall said his company was pleased to partner with Rio.
“Rio Tinto’s work on La Granja has been extensive to date and we share our partner’s view that the project has the potential to be a Tier one copper mine,” Pascall said.
“We look forward to working together to build on this foundation, leveraging First Quantum’s core strengths in mine design, project development and community engagement to progress La Granja to the next stage.
“First Quantum is excited about broadening our existing relationships in Peru and we are appreciative of the support provided by the Government of Peru to this important partnership for its future major investment in the country.”