FQM joins Rio Tinto in Peru copper pursuit

Ravensthorpe miner First Quantum Minerals has inked a deal under which it will invest up to $651 million for a majority stake in a copper project in Peru with Rio Tinto. 

Under the proposed arrangement, First Quantum will buy a 55 per cent stake in the La Granja copper project in Peru – slated as one of the world's largest undeveloped copper projects – for $105 million.

As majority owner, First Quantum has also committed to invest a further $546 million to fund La Granja through to a feasibility study and eventually towards development.

Costs after the sole funding commitment will be applied on a pro-rata basis between Rio Tinto and FQM.

A timeline for the project has not yet been given however the transaction is expected to be completed by the end of the third quarter of 2023, subject to regulatory approvals.

Rio’s copper chief executive, Bold Baatar, said the deal would strengthen the company’s commodity portfolio on the back of its multi-billion dollar Turquoise Hill acquisition and commencement of underground mining at Oyu Tolgoi in Mongolia.

“This partnership underscores not only La Granja’s potential to be a significant copper producer, but Peru’s position as one of the world’s most important mining investment destinations,” he said.

FQM chief executive Tristan Pascall said Rio’s work on the project, which it acquired from the Peruvian government in 2006, had been extensive to date.  

“We look forward to working together to build on this foundation, leveraging First Quantum’s core strengths in mine design, project development and community engagement to progress La Granja to the next stage,” he said.

Vancouver-based First Quantum operates several base metal mines internationally, including the Ravensthorpe nickel operation in Western Australia.