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First Quantum considering team up with Rio Tinto on Peru copper mine

First Quantum, Haquira, Antares, Peru

First Quantum Minerals is looking for strategic partners to develop new copper projects and a joint venture with Rio Tinto in Peru could be on the cards.

“That is what we are going to explore and it just depends on what kind of partner we get,” First Quantum CEO Philip Pascall said on the sidelines of the Mines and Money conference in London, referring to the company’s plans to find strategic partners. 

“There are a number of different potential players, not necessarily mining companies,” he added.

When asked if First Quantum could partner with Rio to develop a copper mine in Peru, Pascall said that would be one of the options. A Rio spokesman declined to comment.

First Quantum owns the Haquira deposit in southern Peru and Rio owns the La Granja porphyry copper project in the South American country.

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Pascall said new copper mines generally require between $3bn and $4bn to develop as grades have declined in recent years necessitating higher mining volumes. First Quantum is heavily indebted, carrying a $7.6bn net debt at the end of its third quarter, up 24% from a year ago, according to the company’s latest financial statements.

It began commercial production in September at the Combre Panama mine where Pascall said he was looking for a partner to replace Korea Resources Corp, which owns 10%.

First Quantum’s acquisition of Antares Minerals and its principal asset, the Haquira deposit, was finalized in December 2010.

The deposit has reported measured and indicated resources of 3.7 million tonnes of contained copper equivalent and inferred resources of 2.4 million tonnes of contained copper equivalent.