Rio Tinto share price lifts on copper project news

The ASX 200 giant has entered a $651 million deal to unlock its La Granja copper project' development.

| More on:
A smiling miner wearing a high vis vest and yellow hardhat does the thumbs up in front of an open pit copper mine.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

Key points

  • The Rio Tinto share price is up 1.9% right now, trading at $119.45
  • Its gains come amid news of a $651 million joint venture to develop Peru's La Granja copper project 
  • Rio Tinto copper chief executive Bold Baatar said La Granja is an "exciting but complex project"

The Rio Tinto Ltd (ASX: RIO) share price is pushing higher on Friday. Its gains come amid news the company's entered a joint venture to kick start work at one of the world's largest undeveloped copper deposits.

Canada-listed First Quantum Minerals will acquire a 55% stake in Rio Tinto's Peru-based La Granja copper project for $105 million. The company has also committed to invest up to $546 million to fund its initial development.

The S&P/ASX 200 Index (ASX: XJO) mining giant bought the project in 2006. Today's agreement is said to be key to unlocking its progress.

The Rio Tinto share price is $119.47 at the time of writing, 1.88% higher than its previous close.

Created with Highcharts 11.4.3Rio Tinto Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

For comparison, the ASX 200 has risen 0.71% right now.

Let's take a closer look at the $169 billion Aussie mining company's latest deal.

Rio Tinto enters $651m copper joint venture

The Rio Tinto share price is outperforming today as the market seemingly takes notice of the potential offered by a major copper project – one a company executive labelled "exciting but complex".

The high-altitude La Granja project boasts an indicated and inferred mineral resource of 4.32 billion tonnes at 0.51% copper.

Extensive drilling previously completed by Rio Tinto expanded the project's declared resource and the understanding of its ore body. It also established partnerships with host communities, local and national governments.

The transaction announced today is expected to be finalised in the third quarter of 2023. After that, First Quantum will operate the project through to its feasibility study.

From that point, all expenditures will be applied on a pro-rata basis according to the pair's respective ownership of the project.

Rio Tinto copper chief executive Bold Baatar commented on the new joint venture, saying:

La Granja is an exciting but complex project that has the potential to be a significant new source of the copper that is needed for the energy transition.

This partnership underscores not only La Granja's potential to be a significant copper producer, but Peru's position as one of the world's most important mining investment destinations.

Developing La Granja would also further strengthen Rio Tinto's copper portfolio following the acquisition of Turquoise Hill Resources and commencement of underground mining at Oyu Tolgoi in Mongolia.

Rio Tinto share price snapshot

The Rio Tinto share price has performed well in recent months.

The stock has gained 3% since the start of 2023 and is trading flat year-on-year.

Meanwhile, the ASX 200 has also lifted 3% year to date. Though, it's fallen 4% over the last 12 months.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

A man slumps crankily over his morning coffee as it pours with rain outside.
Materials Shares

Why is this ASX 300 lithium stock sinking 17% today?

What's going on with this lithium stock today? Let's find out.

Read more »

Man holding a calculator with Australian dollar notes, symbolising dividends.
Materials Shares

$10k invested in Pilbara Minerals shares 5 years ago is now worth…

Let's see if this lithium miner delivered the goods for investors.

Read more »

Female miner in hard hat and safety vest on laptop with mining drill in background.
Broker Notes

Experts reveal 2 buys and 1 sell in the ASX 200 materials sector

And they're not all mining companies, either.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Materials Shares

Pilbara Minerals shares jumps 10% on big news

This lithium miner is having a day to remember on Wednesday. But why?

Read more »

Three miners looking at a tablet.
Materials Shares

Why Bell Potter says this ASX mining stock is a top buy

Let's see which stock the broker is tipping to deliver big returns.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Materials Shares

Down 39% in a year, why IGO shares still look overpriced

A leading expert doesn’t believe IGO shares are out of the woods just yet.

Read more »

Man with rocket wings which have flames coming out of them.
Materials Shares

This ASX 300 stock is surging 25% on US defence deal

The announcement of a 'a pivotal milestone' is getting investors excited today.

Read more »

A happy construction worker or miner holds a fistful of Australian dollar notes.
Materials Shares

$5,000 invested in BHP shares 5 years ago is now worth…

Will its shareholders be happy with their investment? Let's find out.

Read more »