Rio Tinto, Codelco join forces to find more copper in Chile

Rio Tinto had earlier in the day entered into a $45.6 million-agreement with Pan American Silver (TSX, NYSE: PAAS) for a 57.74% stake its Agua de la Falda (ADLF) unit, which holds the historical Jeronimo project in the Atacama region and several adjoining concessions.

Codelco, which has the remaining 42.26% in Agua de la Falda, said the company was incorporated into its portfolio in July 1996 with the focus of  prospecting, exploring and mining gold and other precious minerals.

For this reason, ADLF’s mining holdings have not been the target of copper-focused exploration for more than 25 years, Codelco said.

Studies carried out by both Codelco and Rio Tinto, the world’s second-largest miner and one of the main owners of Escondida copper mine, indicate the area has the potential to hold significant copper deposits, which will be the new and main focus of ADLF moving forward.

“This is an unbeatable opportunity for two industry-leading mining companies to work together, leveraging the combined experiences, strengths and capabilities of each organization,” Codelco’s chairman Máximo Pacheco said in the statement.

He noted the company, the world’s largest copper miner, is not foreign to public-private partnerships, which have proven to be successful for the company and Chile for many years.

“We are convinced this modality is a viable alternative to promote new deposits, and complement the important portfolio of exploration and projects Codelco is developing,” Pacheco said.

Rio Tinto’s chief executive, Jakob Stausholm, said the company has long flagged copper as a strategic metal, which plays a fundamental role in the global energy transition.

“Finding better ways to provide the materials the world needs requires strategic alliances, and we are pleased to make our exploration capabilities, knowledge and technologies available to ADLF, together with Codelco’s valuable experience and significant local presence,” Stausholm said.

The partnership between Codelco and Rio Tinto will be based on an underground mining collaboration agreement reached in October 2022.