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(Alliance News) - Rio Tinto PLC on Friday said it has entered into a deal with First Quantum Minerals Ltd to form a joint venture at the La Granja copper project in Peru.
The Anglo-Australian mining and metals company said La Granja, one of the largest undeveloped copper deposits in the world, has the potential to be a "large, long-life operation".
The company added that La Granja has a published indicated and inferred Mineral Resource of 4.32 billion tonnes at 0.5% copper.
Rio Tinto said that the JV will combine the two companies' knowledge, expertise and resources to progress the project at La Granja. First Quantum will hold a 55% stake for USD105 million, and commit to a further USD564 million investment, to fund capital and operational costs through a feasibility study and toward development.
Following First Quantum's sole funding, all expenses will be applied according to the project's share ownership.
The firm said it expects to complete the transaction in the third quarter of 2023.
Bold Baatar, chief executive of Rio Tinto Copper said: "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.
"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."
Rio Tinto purchased the project from the Peruvian government in 2006, and has completed extensive drilling and expanded the declared resource.
Rio Tinto shares rose 0.2% to 5,450.00 pence each in London on Friday morning. First Quantum shares closed up 2.5% at CAD30.75 in Toronto on Thursday.
By Harvey Dorset, Alliance News reporter
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