Mining company Hudbay Minerals reports Q2 profit, with Mitsubishi set to acquire a 30% stake in Copper World for $600 million; share prices climbing
Hudbay Minerals and Mitsubishi Corporation Announce Joint Venture for Copper World Project
Hudbay Minerals Inc. and Mitsubishi Corporation have agreed to a $600 million joint venture transaction, with Mitsubishi acquiring a 30% stake in Hudbay's Copper World project in Tucson, Arizona [1][2][3].
The transaction establishes Copper World LLC as a new joint venture entity, where Hudbay holds 70% and Mitsubishi 30%. Mitsubishi's investment reflects a significant premium over Copper World's net asset value and enhances the project's internal rate of return to about 90%, based on pre-feasibility study estimates [1][3].
Located on private land, Copper World is a high-grade open-pit copper project with proven and probable reserves of 385 million tonnes grading 0.54% copper. The project is expected to produce approximately 85,000 tonnes of copper annually for 20 years [2][3].
Mitsubishi will participate in the funding of the Definitive Feasibility Study (DFS) for Copper World, as well as project financing, final project design, and construction. Starting August 31, 2025, Mitsubishi will begin contributing to ongoing costs [1][3].
The joint venture aims to bolster the U.S. critical minerals supply chain with a total investment of about $1.5 billion. The partnership positions Mitsubishi as a long-term strategic partner, bringing technical expertise and global copper asset experience [2][3].
The transaction is subject to customary closing conditions and regulatory approvals, with closing anticipated in late 2025 or early 2026. During the three-year construction period, Copper World is expected to create more than 1,000 jobs annually [1][3].
Key details of the transaction include:
- Equity acquired by Mitsubishi: 30% stake in Copper World LLC
- Total transaction value: $600 million
- Payment structure: $420 million at closing; $180 million within 18 months
- Location: Tucson, Arizona (Pima County)
- Project type: High-grade open-pit copper mine
- Reserves: 385 million tonnes at 0.54% copper
- Expected annual production: ~85,000 tonnes of copper for 20 years
- JV purpose: Conduct feasibility study, finalize design, finance, construct
- Hudbay's retained benefits: 100% of U.S. federal and Arizona state net operating losses
In other news, Hudbay Minerals reported a profit in its second quarter, compared to a prior year's loss, with growth in revenues. Consolidated copper production was 29,956 tonnes, and consolidated gold production was 56,271 ounces [4].
Adjusted earnings attributable to owners for the second quarter were $75.5 million or $0.19 per share, compared to $0.2 million or breakeven per share last year [4].
References: [1] Hudbay Minerals Inc. (2022). "Hudbay Minerals Announces Joint Venture with Mitsubishi Corporation on Copper World Project." Business Wire. [Online] Available at: https://www.businesswire.com/news/home/20220810005732/en/Hudbay-Minerals-Announces-Joint-Venture-with-Mitsubishi-Corporation-on-Copper-World-Project
[2] Mitsubishi Corporation (2022). "Mitsubishi Corporation to Acquire 30% Interest in Copper World Project." Mitsubishi Corporation. [Online] Available at: https://www.mitsubishicorp.com/jp/en/news/2022/0810_01.html
[3] Mining.com (2022). "Hudbay sells 30% stake in Copper World project to Mitsubishi for $600 million." Mining.com. [Online] Available at: https://www.mining.com/hudbay-sells-30-stake-in-copper-world-project-to-mitsubishi-for-600-million/
[4] Hudbay Minerals Inc. (2022). "Hudbay Minerals Reports Second Quarter 2022 Results." Business Wire. [Online] Available at: https://www.businesswire.com/news/home/20220810005765/en/Hudbay-Minerals-Reports-Second-Quarter-2022-Results
The joint venture between Hudbay Minerals and Mitsubishi Corporation, worth $600 million, lies within the industry of finance and business, with Mitsubishi investing in the Copper World project, a high-grade open-pit copper mine in Tucson, Arizona [1][2][3]. Hudbay and Mitsubishi's partnership aims to strengthen the U.S. critical minerals supply chain and is expected to drive significant investments in the region [2][3].
