Resolution Copper invests $144 million in next phase

Resolution Copper will invest $144 million to advance the next phase of its deep copper project near Superior, Arizona, adding to $500 million of preliminary spending disclosed in March after a land exchange that unlocked further development.

The joint venture is owned 55% by Resolution Copper Company, a Rio Tinto (NYSE, LON, ASX: RIO) subsidiary, and 45% by BHP Copper Inc., a BHP (NYSE, LON, ASX: BHP) subsidiary. It is not yet producing copper. The company did not set a date for first production.

The new funds will pay for feasibility studies and final design engineering to install development and production-level material-handling equipment in both shafts and to build new water-treatment facilities, Resolution Copper said on Thursday. The spending will also support ongoing exploration drilling, the purchase of underground development and production equipment, and procurement of long-lead items such as transformers, circuit breakers and switchgear. An additional 50 roles will be hired, including mining, geotech and geology technicians, geologists, engineers and project services staff.

The deposit lies between 5,000 and 7,000 feet (about 1,500 to 2,100 metres) underground. Resolution Copper describes it as one of the world's largest untapped copper deposits and says it has the potential to become one of the largest copper mines in the United States, create thousands of direct and indirect jobs and contribute about $1 billion a year to Arizona's economy.

"We are moving forward with urgency and discipline. This program will accelerate underground development and our path towards first copper production while maintaining safe underground operations and construction, positioning the project strongly for its next investment decision," president Vicky Peacey said in the company's statement.

After the land exchange

Congress authorized the land exchange in 2014. Resolution Copper said in March that more than a decade of consultation with civil-society organisations, the Town of Superior, local communities and Native American tribes had shaped the process.

On March 16, the company and the US Forest Service completed the exchange. Resolution Copper received more than 2,400 acres adjacent to the historic Magma copper mine in Superior and transferred more than 5,400 acres of environmentally and culturally sensitive land into national forests and national conservation areas, it said at the time. The exchange followed a March 13 ruling by the US Court of Appeals for the Ninth Circuit denying requests to stop it. The US government also issued a final Record of Decision that day, completing the federal land-exchange process, finishing the environmental review under the National Environmental Policy Act and authorizing future special-use permits for pipelines, power lines and roads across National Forest System lands, according to the project's current-status page.

The March package covered about $500 million of preliminary spending over two years for enabling works, including surface drilling, infrastructure upgrades, initial underground development, support for Native American tribes and local communities, and costs tied to the exchange, along with about 100 jobs. Thursday's $144 million is additional to that programme.

In March, Rio Tinto copper chief executive Katie Jackson said the project had the potential to satisfy up to 25% of America's copper demand for decades to come.

The company says no decision has been made to begin mining and that future phases remain subject to additional review, permits and community engagement. Further work will run alongside state-level permitting, and a later investment decision is still required before the project can produce copper.