Canadian firm First Quantum Minerals and mining major Rio Tinto have finalised the establishment of a joint venture (JV) to develop the La Granja copper project in Peru.
Located at a high altitude in Cajamarca, Northern Peru, La Granja is a complex orebody with a potential for a large, long-life operation. The project’s indicated and inferred mineral resources total at 4.32 billion tonnes at 0.51% of copper.
After fulfilling conditions such as regulatory clearances in Peru, First Quantum picked a 55% interest in the project from Rio Tinto, in a $105m deal. It plans to spend another $546m in the JV.
The acquisition was announced in March this year.
Part of the initial funding will be used to complete a feasibility study over the next two to three years. The remaining capital will be used for the project’s construction following a positive investment decision.
After completion of the initial funding, all the subsequent expenditures will be applied on a pro rata basis as per the interests owned in the project.
Initially, the work will continue to progress with community engagement and feasibility study.
The study will focus on the development of an updated geological resource and reserve model, which will need additional infill drilling to upgrade inferred resources to measured and indicated categories.
Additional metallurgical studies will establish optimal processing configurations to be conducted simultaneously together with high-level project layout and configuration of associated infrastructure requirements and logistical routes.
First Quantum CEO Tristan Pascall said: “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. We appreciate the support from the Government of Peru for the completion of this transaction.”
Rio Tinto Copper CEO Bold Baatar said: “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.”
