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Rio Tinto and First Quantum Minerals have completed a transaction to form a joint venture that will work to unlock the development of the La Granja project in Peru.

One of the largest undeveloped copper deposits in the world, La Granja is a complex orebody located at high altitude in Cajamarca in northern Peru.

It has the potential to be a large, long-life operation, with a published indicated and inferred mineral resource of 0.51 per cent copper totalling 4.32 billion tonnes.

“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,” Rio Tinto copper chief executive Bold Baatar said.

“Our partnership with First Quantum will bring our combined development capabilities and deep knowledge of La Granja to progress the project,”

First Quantum has acquired a 55 per cent stake in the project for $105 million and will invest up to a further $546 million to fund capital and operational costs and take the project through a feasibility study and toward development.

Upon completion of First Quantum’s sole funding commitment, all subsequent expenditures will be applied on a pro-rata basis according to the share ownership of the project.

“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,” First Quantum chief executive officer Tristan Pascall said.

“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. We appreciate the support from the Government of Peru for the completion of this transaction.”

As majority owner, First Quantum will operate the La Granja project with initial work focused on completing the feasibility study, as per the transfer agreement signed with the Preuvian Government.

Rio Tinto acquired the La Granja Project from the Peruvian Government in 2006 and carried out an extensive drilling program that significantly expanded the understanding of the orebody and established partnerships with host communities as well as local and national governments.