2 days ago
Mitsubishi to acquire 30% interest in Hudbay's Copper World project for $600m
Hudbay Minerals has announced a strategic investment by Mitsubishi, with the latter set to acquire a 30% interest in the Copper World project in Arizona for $600m.
The deal will see Mitsubishi contribute an initial $420m for the equity interest at closing, followed by a matching contribution of $180m within 18 months.
The joint venture (JV), Copper World LLC, will be a new limited liability corporation, with Hudbay retaining 100% of its existing US federal net operating losses, amounting to approximately $275m (C$378.81m), and Arizona state losses of $210m.
Mitsubishi's investment will cover 30% of ongoing costs from 31 August 2025, and contribute to the development, financing and construction of the project.
The transaction is expected to close between late 2025 and early 2026, subject to regulatory approvals and customary closing conditions.
Hudbay president and CEO Peter Kukielski said: 'Securing Mitsubishi as a 30% partner in Copper World is an important milestone for Hudbay as we establish a long-term strategic partnership to advance this high-quality copper project towards sanctioning and to unlock significant value in our copper growth portfolio.
'Through this partnership we will leverage our complementary strengths to deliver our world-class Copper World project, produce domestic copper in the US for the US critical minerals supply chain and create value for all our stakeholders.'
Copper World is expected to bolster the US critical minerals supply chain with a $1.5bn direct investment, marking one of southern Arizona's largest investments.
The project, situated on private land owned by Hudbay, is projected to produce 85,000 tonnes of copper annually over an initial 20-year lifespan.
The construction phase is expected to create more than 1,000 jobs each year, with commitments in place from seven US labour unions.
Upon commencement of production, Copper World is set to generate more than $850m in US taxes and create more than 400 direct and 3,000 indirect jobs in Arizona.
The mine's contribution to the domestic copper supply chain will enhance US manufacturing capacity, national security and energy independence.
Mitsubishi critical minerals division COO mineral resources group Taro Abe said: 'Participation in Copper World is of significant strategic importance for Mitsubishi towards the realisation of its growth strategy within the copper sector.
'We are pleased to collaborate with Hudbay, whose operational and development expertise is well-recognised and proven, to advance a definitive feasibility study.'
Furthermore, Hudbay plans to revise its existing 'Wheaton Stream' agreement for gold and silver from Copper World, potentially increasing the project's value and offering upside exposure to precious metal prices.
The enhanced stream includes up to $70m in contingent payments for future mill expansion milestones and amended ongoing payments based on spot gold and silver prices.
Barclays Capital Canada and TD Securities are acting as financial advisors, while Sullivan & Cromwell is providing legal counsel to Hudbay in these transactions.
In January, Hudbay received an air quality permit from the Arizona Department of Environmental Quality for the development of the Copper World project.
"Mitsubishi to acquire 30% interest in Hudbay's Copper World project for $600m" was originally created and published by Mining Technology, a GlobalData owned brand.
The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Effettua l'accesso per consultare il tuo portafoglio
