Mitsubishi has agreed to acquire a 30% stake in the Copper World copper mine project in Tucson, Arizona, from Hudbay Minerals for $600m.
Under the terms of the deal, $420m will be paid by Mitsubishi at closing and an additional $180m is earmarked for development costs. This transaction is pending the fulfilment of customary closing conditions.
Hudbay Minerals will collaborate with Mitsubishi in a joint venture (JV) to conduct a definitive feasibility study for the Copper World project.
According to Hudbay Minerals, Mitsubishi’s investment reflects a significant premium over the consensus net asset value for Copper World. It also increases the open-piy project’s internal rate of return for Hudbay Minerals, based on pre-feasibility study estimates, to approximately 90%.
The partnership marks Mitsubishi as a long-term strategic partner, enhancing Hudbay Minerals’ capacity to advance the Copper World project towards a final investment decision expected in 2026.
Mitsubishi is expected to bring its extensive experience with investments in major copper assets worldwide and will provide its pro-rata share of future equity capital contributions.
Mitsubishi critical minerals division chief operating officer 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.”
Hudbay Minerals has also amended its precious metals streaming agreement with Wheaton Precious Metals. The agreement now includes an additional contingent payment of up to $70m, linked to potential mill expansions at Copper World, with ongoing payments for gold and silver adjusted to 15% of spot prices.
The initial phase of the Copper World project is located on Hudbay Minerals-owned private land and is fully permitted. It is expected to produce 85,000 tonnes of copper annually over an initial 20-year mine life.
During the construction phase, more than 1,000 jobs are anticipated each year.
The cooperation between Hudbay Minerals and Mitsubishi in the Copper World project seeks to bolster US copper supply, contributing significantly to US manufacturing capacity and energy independence.
The mine is projected to generate over $850m in US taxes while creating direct and indirect employment opportunities.
Hudbay Minerals president and CEO Peter Kukielski said: “After a highly robust and competitive process, we have selected the premier partner of choice in Mitsubishi.
“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.”
