The Nickel Rim South mine near Garson, Ont., in 2006. Vale and Glencore are studying potential cost savings from using the facility's infrastructure as part of a new joint copper mining venture.Deborah Baic/The Globe and Mail
Two global mining giants are evaluating a joint venture in Sudbury, Ont., that could lead to a US$2-billion copper project.
Vale Base Metals Ltd., the Canadian unit of Brazilian conglomerate Vale SA, said Tuesday that Switzerland’s Glencore PLC has agreed to a framework to evaluate extracting the critical mineral from their adjacent properties in the region.
A joint venture would add to a string of planned copper projects in Canada as the mining industry seeks to become a key supplier of the metal used in electric vehicles, batteries, advanced electronics and the infrastructure needed to power it all. Some industry forecasts project demand for copper to double by the middle of the century as the world shifts to a low-carbon economy and the population grows.
Vale said in a statement that the companies will study potential cost savings of mining their deposits using the shaft and infrastructure at Glencore’s Nickel Rim South Mine, which has been wound down. If the venture goes ahead, the companies would deepen the shaft and develop new drifts to reach nearby ore deposits.
There is also the potential to produce other critical minerals, including nickel, cobalt, gold and platinum group metals.
As 50/50 partners, the companies would produce 880,000 tonnes of copper over 21 years. Vale pegged the capital cost at US$1.6-billion to US$2-billion.
The companies will conduct detailed engineering and consultation work next year and expect to make a final investment decision in the first half of 2027, Vale said.
Earlier this year, Teck Resources Ltd. said it was proceeding with a $2.4-billion extension of its Highland Valley Copper Mine, making it the largest critical-minerals investment in B.C.’s history. The development will extend the mine’s life from 2028 to 2046.
Two others – the $2.6-billion expansion of Newmont Mining Corp.’s Red Chris copper mine in Northern B.C. and Foran Mining Corp.’s $1-billion McIlvenna Bay mine in Saskatchewan – were referred this fall to the federal government’s Major Projects Office to be considered for fast-track approvals.
At Vale’s investor day in London on Tuesday, executives said the company aims to nearly double its worldwide copper production to 700,000 tonnes per year by 2035 from 370,000 today.
Vale projects returns from all its copper projects of more than 25 per cent, not including the joint venture with Glencore.
Analysts at the investment bank Jefferies said they do not believe the market has placed full value on these prospects in the company’s share price, and have a buy rating on the stock.