British-Australian multinational iron ore company Rio Tinto and Canadian-based global copper company First Quantum Minerals will form a joint venture to accelerate the development of the La Granja project in one of the world’s largest undeveloped copper deposits in Peru.
Having received the necessary regulatory approvals from the Peruvian government, First Quantum became the project operator and acquired a 55% stake in the project for $105 million, according to Rio Tinto’s release on Monday.
The company will invest up to an additional $546 million in the joint venture to solely fund the capital and operational expenses to move the project from the feasibility phase to the development phase.
However, all additional expenses will be charged proportionately based on the share of ownership of the project after the sole funding commitment has been fulfilled.
‘La Granja has the potential to be a large, long-life operation and supply the copper that will be needed as the world transitions to a greener economy, where responsible mining will be the only acceptable way to produce metals,’ First Quantum Chief Executive Officer Tristan Pascall was quoted as saying in the statement.
‘As operator, we will leverage our core strengths in mine design, project development and community engagement and look forward to developing our partnership with Rio Tinto. We appreciate the support from the Government of Peru for the completion of this transaction,’ he added.
Rio Tinto acquired the La Granja Project from the Government of Peru in 2006 and first entered into an agreement with First Quantum Minerals to form a joint venture to develop the La Granja copper project on March 30.
As a complex orebody located at a high altitude in Cajamarca in northern Peru, La Granja has the potential to be a long-life operation with a stated, indicated and inferred mineral resource totaling 4.32 billion tonnes, over half of which is copper.
‘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,’ Rio Tinto Copper Chief Executive Bold Baatar said in the statement.
‘Our partnership with First Quantum will bring our combined development capabilities and deep knowledge of La Granja to progress the project,’ he added.
