Update on Copper World & Hudbay

Canadian company planning Copper World/Rosemont mine complex is seeking buyer or merger partners

Posted on July 7, 2023 by admin

According to press reports, the Canadian miner seeking permits to build the proposed Copper World/Rosemont mine complex in the northern half of the Santa Rita Mountains southeast of Tucson has put itself up for sale.

In a July 7 interview with Reuters, Toronto-based Hudbay Minerals Inc. Chief Executive Officer Peter Kukielski said the company is willing to receive offers. Kukielski also said the company was open to merging with other miners to create one mega copper company.

“I would certainly like to put them together,” he told Reuters.

In a potentially significant development in the timeline to develop the Copper World/Rosemont complex, the Reuters article also states that Hudbay’s “aim is to triple its copper production by the end of the decade, which it is planning to achieve through mergers or acquisitions and not by organic growth.” (Emphasis added.)

The strategy of not relying on “organic growth” appears to be a shift in the company’s previous statements that it is committed to developing the Copper World/Rosemont complex, with the Hudbay Board of Directors projected to make a final decision on whether to proceed in 2025.

Hudbay acquired the Copper World/Rosemont complex from Vancouver, B.C., junior miner Augusta Resource Corporation in July 2014 in a $500 million stock deal.

Hudbay initially planned to develop the Rosemont mine on the northeast flank of the Santa Rita Mountains. But that effort was derailed by a 2019 Tucson federal court decision upheld in May 2022 by the U.S. Court of Appeals for the Ninth Circuit.

The federal courts held that the U.S. Forest Service’s assumption that Hudbay had automatic rights under the 1872 Mining Law to permanently bury thousands of acres of public land with waste dumps was contrary to long-established law.

“The Service thus gave to Rosemont, essentially free of charge, the right to permanently occupy 2,447 acres of National Forest land with 1.9 billion tons of its waste rock based on an improper assumption,” Judge William Fletcher wrote in the appeals court ruling.

Following the federal court rulings, Hudbay shifted its development strategy to develop a $2.8 billion mining complex on 4,500 acres of private land it controls on the west side of the Santa Rita Mountains. Hudbay also began extensive exploration drilling that has significantly damaged the land and washes.

Hudbay must obtain air pollution and water quality permits from the state Department of Environmental Quality before it can proceed with mining.

Hudbay claims it will produce finished copper onsite by using a process that is not widely utilized in the copper industry to convert sulfide ore into nearly pure copper plates. The process would generate millions of tons of sulfuric acid that pose a significant pollution threat to the Santa Cruz River Valley.

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