Hudbay Minerals (TSX:HBM,NYSE:HBM) has struck a US$600 million deal with automobile giant Mitsubishi (TSE:8058) for a 30 percent stake in its Copper World project in Arizona, marking one of the largest foreign investments in the US copper sector in recent years.
Announced Tuesday (August 12), the agreement will see Mitsubishi pay US$420 million on closing and a further US$180 million within 18 months.Mitsubishi will also fund its 30 percent share of future capital contributions as the mine moves toward full construction.
Hudbay president and chief executive Peter Kukielski called the joint venture “an important milestone” for the Toronto-based miner.
“Through this partnership we will leverage our complementary strengths to deliver our world-class Copper World project, produce domestic copper in the US for the US critical minerals supply chain and create value for all our stakeholders,” Kukielski said in the company’s statement.
The deal pairs Hudbay, the fourth-largest copper company listed on the NYSE, with one of Japan’s biggest trading houses, which has a long history of joint ventures in some of the world’s most productive copper mines.
Copper World’s first phase, located on private land in Pima County, about 50 kilometers southeast of Tucson, is fully permitted and expected to produce 85,000 tons of copper annually over an initial 20-year mine life.
Hudbay positions Copper World as “Made in America” copper production, a label that may gain added importance following last month’s move by US President Donald Trump to impose a 50 percent tariff on imported copper pipes, wiring, and other semi-finished products, while leaving refined copper cathodes and raw materials untaxed.
It estimates the project will contribute US$1.5 billion to the US critical minerals supply chain and become one of the largest investments in southern Arizona’s history.
The construction is also projected to create more than 1,000 jobs a year over a three-year period, with letters of commitment in place with seven US labour unions. Once operational, the mine is expected to employ over 400 people directly and support up to 3,000 indirect jobs.
Hudbay says it will also deliver more than US$850 million in US tax revenues over the mine’s first two decades.
On the financial side, Hudbay said the Mitsubishi transaction will significantly improve its flexibility by cutting its share of remaining capital contributions for Copper World to about US$200 million based on pre-feasibility study (PFS) estimates.
In addition, the company has also reached a non-binding agreement with Wheaton Precious Metals (TSX:WPM,NYSE:WPM) to amend their existing streaming deal on Copper World’s gold and silver output.
The revised terms keep the US$230 million upfront deposit in place but add up to US$70 million in contingent payments tied to future mill expansions and shift ongoing payments from fixed prices to 15 percent of spot market prices.
Mitsubishi’s investment adds to its existing portfolio of stakes in five of the world’s 20 largest copper mines by 2024 production. In North America, its wholly-owned subsidiary Mitsubishi Corporation (Americas) manages about US$9 billion in assets across more than 50 subsidiaries and affiliates in industries from mineral resources to power generation.
The Copper World stake provides the Japanese trading house with long-term access to US copper production at a time when global demand for the metal is expected to climb due to its role in electrification, renewable energy, and electric vehicle production.
Hudbay said that it expects to finish the definitive feasibility study by mid-2026 and will make a final investment decision later that year.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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