In a landmark move, mining giants Rio Tinto plc and First Quantum Minerals have joined forces to develop the highly anticipated La Granja copper project in Peru. This groundbreaking joint venture aims to unlock the immense potential of one of the world’s largest untapped copper deposits and establish it as a premier Tier 1 copper mine.
Located in the scenic Cajamarca region of Northern Peru, La Granja boasts a vast indicated and inferred mineral resource of 4.32 billion tons, with a copper grade of 0.51%. The combined expertise and capabilities of Rio Tinto and First Quantum Minerals position them as the ideal partners to transform this copper-rich site into a major global copper producer.
Under the agreement, First Quantum has acquired a majority stake of 55% in the project, investing $105 million. In addition, the company will contribute up to $546 million to fund capital and operational costs for the project’s development and feasibility study. Following the completion of this funding commitment, expenditures will be allocated proportionally based on each party’s ownership share.
With its majority ownership, First Quantum will take the helm in operating the La Granja project, with a primary focus on completing the comprehensive feasibility study. The collaboration between Rio Tinto and First Quantum Minerals promises to pave the way for a successful development phase and open new doors for copper production in the global market.
Rio Tinto’s acquisition of the La Granja Project from the Peruvian government in 2006 set the stage for this transformative partnership. Extensive drilling initiatives over the years have revealed a significantly higher resource base, positioning La Granja as a crucial addition to Rio Tinto’s expanding copper portfolio. This investment complements Rio Tinto’s ongoing development of the Oyu Tolgoi project, located in Mongolia. Oyu Tolgoi is recognized as one of the world’s largest copper and gold deposits, which, upon completion, will rank as the fourth-largest copper mine globally.
Furthermore, Rio Tinto’s Kennecott mine, based near Salt Lake City, Utah, serves as a world-class, integrated copper mining operation. Kennecott not only produces copper but also yields gold, silver, and tellurium as byproducts. The company has plans to extend the life of the open-pit mine beyond 2032 through pre-feasibility studies and is actively exploring the potential for an underground mine beneath the existing pit.
As the global demand for copper soars, driven by factors such as electric vehicles, renewable energy, and infrastructure investments, Rio Tinto and First Quantum Minerals are strategically positioning themselves to capitalize on this trend. While challenges such as declining ore grades, rising costs, and limited developmental opportunities persist, the La Granja project is set to play a pivotal role in meeting the growing demand for copper.
1. What is the significance of the Rio Tinto and First Quantum joint venture?
The partnership aims to develop the La Granja copper project in Peru, unlocking one of the world’s largest untapped copper deposits and establishing it as a premier Tier 1 copper mine.
2. Where is La Granja located?
La Granja is situated in the high-altitude region of Cajamarca, Northern Peru.
3. What is the current mineral resource estimate for La Granja?
The project boasts an indicated and inferred mineral resource of 4.32 billion tons at a copper grade of 0.51%.
4. How much stake has First Quantum acquired in the project?
First Quantum has acquired a majority stake of 55% in the La Granja project.
5. How will the project be funded?
First Quantum will invest $105 million in acquiring the stake and contribute up to $546 million for capital and operational costs related to the project’s development and feasibility study.
6. Who will operate the La Granja project?
As the majority owner, First Quantum will take on the role of operating the La Granja project, with a significant focus on completing the feasibility study.
7. What other notable projects is Rio Tinto involved in?
Rio Tinto is also actively developing the Oyu Tolgoi project in Mongolia, recognized as one of the world’s largest copper and gold deposits.