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BHP has formed a joint venture with Encounter Resources to develop the Elliot copper project in the Northern Territory.

The JV will involve an exploration program that includes seismic surveys and drilling which is set to progress rapidly.

The mining giant has agreed to spend $22 million over 10 years to earn a 75 per cent interest in the project under the farm-in and JV agreement.

BHP’s decision was preceded by copper reaching a record high of $US10,361 ($13,200) per tonne on the London Metal Exchange (LME) in May.

In September 2020, BHP signed an agreement with Encounter to have the option to enter the JV once the two companies complete a validation program at Elliot.

Encounter managing director Will Robinson said the validation program has showed further promise of a large copper discovery at the project, which is located in the Great McArthur Superbasin.

“Copper sourced from sedimentary-hosted deposits is one of the fastest growing sources of high grade copper in the world,” he said.

“The potential for this region to host large sedimentary-hosted copper deposits is rapidly emerging and we are delighted to be teaming up with BHP to apply leading edge technologies in the search for tier 1 copper deposits at Elliott.

“The outcomes of the jointly-designed validation program at Elliott have been illuminating and bolstered the potential for the discovery of large sedimentary-hosted copper deposits under shallow cover in the NT.”

In April, BHP president of minerals for Americas Ragnar Udd said copper is crucial to a sustainable future, with electric vehicles expected to use four times as much copper as petrol cars.

Policy signposts for rapid electric vehicle (EV) adoption were distinctly favourable over the last (12) months and we have revised our internal EV penetration forecasts upwards,” Udd said at the CRU World Copper Conference in Chile.

“These vehicles use four times as much copper as petrol-based cars, and they will also need more infrastructure to connect charging stations to the grid.”