In morning trade the Rio Tinto Limited (ASX: RIO) share price has edged higher following the release of an announcement relating to its U.S. copper project.
At the time of writing the mining giant’s shares are up 0.5% to $100.99.
What was announced?
This morning Rio Tinto announced that it has committed $302 million of additional capital to advance its Resolution Copper project in the U.S. state of Arizona.
According to the release, the investment will fund additional drilling, ore-body studies, infrastructure improvements, and permitting activities as the company looks to progress the project to the final stage of its permitting phase.
What is the Resolution Copper project?
Resolution Copper is one of the largest undeveloped copper projects in the world and has the potential to become one of the world’s largest and most competitive copper mines.
When fully operational, the project, which is owned by Rio Tinto (55%) and BHP Group Ltd (ASX: BHP) (45%), has the potential to supply nearly 25% of the United States copper demand and will create several thousand direct and indirect jobs in the Pioneer Mining District of Arizona.
Upon this latest investment, project partners will have invested over $2 billion to develop and permit Resolution since 2004. This includes sinking a new shaft to mining depth, rehabilitating an existing shaft, extensive drilling and ore body testing, and the permitting and public engagement process.
Rio Tinto chief executive, JS Jacques, believes the project has significant potential, especially given the rise of electric vehicles.
He said “Resolution is one of the most significant undeveloped copper deposits in the world and this additional funding demonstrates Rio Tinto’s commitment to bring the mine into production. The comprehensive permitting process is well underway with the Environmental Impact Study on track to be completed next year according to the regulators schedule.”
Before adding: “The rise of electric vehicles, battery storage, new transmission technology and other green energy innovations are highly copper intensive. We need to prepare now to meet this future demand. Resolution will be well positioned to provide North American manufacturers the copper that is essential to their products.”
Should you invest?
Whilst it will be some time before the project is operational, I believe it has the potential to be another key asset in its portfolio in the future and expect it to bolster its future growth.
Overall, I see it as yet another reason to consider an investment in this mining giant today.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.