First Quantum Minerals and Rio Tinto Announce Joint Venture for La Granja Copper Project in Peru
Canadian firm First Quantum Minerals and mining major Rio Tinto have recently concluded the establishment of a joint venture (JV) to advance the La Granja copper project in Peru. Located in the high-altitude region of Cajamarca, Northern Peru, La Granja is a complex orebody with the potential for a substantial, long-lasting mining operation. The project boasts indicated and inferred mineral resources amounting to 4.32 billion tonnes with a copper grade of 0.51%.
Following the fulfillment of various conditions, including regulatory clearances in Peru, First Quantum acquired a 55% interest in the project from Rio Tinto in a $105 million deal. They have committed to investing an additional $546 million in the joint venture. This acquisition was officially announced in March of this year.
The initial funding will be allocated towards conducting a comprehensive feasibility study over the next two to three years. Subsequent capital will be directed towards the construction phase of the project, contingent on a positive investment decision.
After the initial funding stage, all subsequent expenditures will be distributed proportionally based on the ownership interests in the project. The initial work will primarily focus on community engagement and conducting the feasibility study.
The feasibility study's objectives include the development of an updated geological resource and reserve model, necessitating further infill drilling to upgrade inferred resources to measured and indicated categories. Additionally, metallurgical studies will determine the optimal processing configurations, which will be conducted concurrently with high-level project layout and configuration planning, as well as establishing infrastructure requirements and logistical routes.
Tristan Pascall, CEO of First Quantum, stated, "La Granja has the potential to be a large, long-lasting 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. As the 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."
Bold Baatar, CEO of Rio Tinto Copper, commented, "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. Our partnership with First Quantum will bring our combined development capabilities and deep knowledge of La Granja to progress the project."
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