Rio Tinto and First Quantum Minerals have established a joint venture (JV) for the development of Peru’s La Granja copper project.
La Granja, harbouring one of the world’s largest untapped copper deposits, sits in the high-altitude region of Cajamarca, Northern Peru. It has an indicated and inferred mineral resource of 4.32 billion tonnes at 0.51 per cent copper.
Rio Tinto acquired La Granja project from the Government of Peru in 2006 and carried out 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.
The latest JV with First Quantum will tap into the undeveloped orebody.
“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.
“Our partnership with First Quantum will bring our combined development capabilities and deep knowledge of La Granja to progress the project.”
The JV follows regulatory approvals from the Peruvian Government, allowing Canadian miner First Quantum to secure a commanding 55 per cent stake in the project with a $105 million investment.
An additional $546 million commitment from First Quantum will cover capital and operational expenses, steering the project through feasibility studies and eventual development. Upon fulfilling this financial obligation, future costs will be distributed proportionally based on ownership.
First Quantum, as the majority stakeholder, will take the operational lead in advancing the project. Initial steps will focus on a meticulous feasibility study, aligned with an agreement with the Peruvian government.
First Quantum chief executive officer Tristan Pascall reacted to the JV.
“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 the greener economy and where responsible mining will be the only acceptable way to produce metals.”
“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.”
Rio Tinto has been ramping up its copper efforts, with chief executive Jakob Stausholm saying that the company aims to triple production at its Oyu Tolgoi copper mine in Mongolia by the end of the decade.
Production at Oyu Tolgoi (on a 100 per cent basis) increased by 40 per cent from the second quarter of 2022.
This was supported by a boost in head grades from 0.4 per cent to 0.52 per cent, as the company ramps up underground production at the mine.