FQM acquires a 55% share of the La Granja for US$105M and will become the project’s operator

Canadian firm First Quantum Minerals (FQM) and mining major Rio Tinto have finalised the establishment of a joint venture (JV) to develop the La Granja copper project in Peru.

After fulfilling conditions such as regulatory approvals from the Peruvian Government, FQM acquired the majority stake in the project with the remaining 45% taken up by Rio Tinto. FQM will invest an additional US$546M as part of the initial funding into the project. Part of this will be used to complete a feasibility study over the next two to three years. The remaining capital will assist the project’s construction following any positive investment decision. Upon completion of the initial funding amount, all subsequent expenditures will be applied on a pro-rata basis according to the share ownership of the La Granja project.

The La Granja project is located in the district of Querocoto in the northern region of Cajamarca, Peru, approximately 90km northeast of Chiclayo. It is a large undeveloped copper resource with a published Inferred Mineral Resource estimate of 4.32Bnt at 0.51% Cu and has the potential for substantial expansion. The deposit sits within the Andean porphyry belt that extends throughout South America and is well-known to contain copper-gold-silver-molybdenum-zinc mineralisation. The Granja project is no exception and although primarily producing copper, the JV may also seek to generate additional revenue from these associated by-products.

The near-term focus of the project aims to progress community engagement and complete the feasibility study. The latter will be focused on developing and updating La Granja’s geological resources and reserve model, which will require additional infill drilling to upgrade inferred, indicated and measured resource categories.

Given its key role in the energy transition, copper demand growth is expected to continue year-on-year.  As a result, the development of the La Granja project would provide an important additional source of new copper supply along with associated by-product critical raw materials.