First Quantum Minerals has wrapped up the previously announced $105m transaction with Rio Tinto to acquire a 55% stake in the latter’s La Granja project in Peru.

The deal, which was announced in March 2023, enables the parties to create a joint venture (JV) to advance what is touted to be among the world’s largest untapped copper deposits.

La Granja has a published inferred mineral resource of 4.32 billion tonnes with a copper content of 0.51% and has the potential for significant expansion. The project is situated in the Querocoto district in the northern part of Cajamarca.

Rio Tinto copper chief executive 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.”

First Quantum Minerals, which has also become the operator of the La Granja project, will make an additional investment of $546m.

A portion of the initial funds will go towards finalising a feasibility study within the upcoming two to three years.

Subsequently, the remaining portion of the initial funding will be allocated to the construction of the Peruvian copper project, subject to a favourable investment decision.

After the initial funding phase, subsequent expenses will be allocated proportionally based on La Granja’s ownership shares.

First Quantum Minerals 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.

“Adding this major project to our portfolio will give First Quantum future optionality in the Company’s project pipeline while we focus on strengthening the balance sheet in the interim.

“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.”

During the initial years, efforts will persist in advancing community engagement and conducting the feasibility study. The study’s focus will be on building an updated geological resource and reserve model, which calls for further infill drilling to upgrade Inferred resources to measured and indicated categories.