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Rio Tinto is set to expand its foothold in Chile’s lucrative mining sector with its decision to purchase PanAmerican Silver’s majority stake in Agua de la Falda S.A., a company holding exploration tenements in the promising Atacama region.

Alongside this acquisition, Rio Tinto has entered into a joint venture with Corporación Nacional del Cobre de Chile (Codelco), the world’s largest copper producer, to jointly explore and develop Agua de la Falda’s potential assets.

Under the terms of the agreement, Rio Tinto will acquire a substantial 57.74 per cent stake in Agua de la Falda at a cost of $45 million, as well as granting new smelter returns royalties. Additionally, Rio Tinto will gain complete ownership of the nearby Meridian Property for $550,000 and the grant of new smelter returns royalties.

Codelco, the world’s largest copper producer, holds the remaining 42.26 per cent stake in Agua de la Falda.

“Copper is critical for the global energy transition, which is at the heart of Rio Tinto’s strategy, and Chile is one of the most important sources of world supply as demand for copper in renewables and electrification grows,” Rio Tinto chief executive officer Jakob Stausholm said.

“Partnerships are essential to find better ways to provide materials the world needs, and we are pleased we can bring our global exploration capability to a joint venture that will be able to access Codelco’s strong local presence and industry expertise.

“Although this is an early-stage exploration project, we are very excited to be actively exploring in Chile in partnership with Codelco.”

Codelco chairman Maximo Pacheco echoed a similar sentiment.

“Codelco welcomes Rio Tinto in Agua de la Falda. This is a remarkable opportunity to put two leading mining companies to work together, leveraging the combined experiences, strengths, and capabilities of each organisation,” he said.

“By joining forces, we can enhance our exploration and development efforts for a highly promising asset.”