The Rio Tinto Ltd (ASX: RIO) share price is pushing higher on Friday. Its gains come amid news the company's entered a joint venture to kick start work at one of the world's largest undeveloped copper deposits.
Canada-listed First Quantum Minerals will acquire a 55% stake in Rio Tinto's Peru-based La Granja copper project for $105 million. The company has also committed to invest up to $546 million to fund its initial development.
The S&P/ASX 200 Index (ASX: XJO) mining giant bought the project in 2006. Today's agreement is said to be key to unlocking its progress.
The Rio Tinto share price is $119.47 at the time of writing, 1.88% higher than its previous close.
For comparison, the ASX 200 has risen 0.71% right now.
Let's take a closer look at the $169 billion Aussie mining company's latest deal.
Rio Tinto enters $651m copper joint venture
The Rio Tinto share price is outperforming today as the market seemingly takes notice of the potential offered by a major copper project – one a company executive labelled "exciting but complex".
The high-altitude La Granja project boasts an indicated and inferred mineral resource of 4.32 billion tonnes at 0.51% copper.
Extensive drilling previously completed by Rio Tinto expanded the project's declared resource and the understanding of its ore body. It also established partnerships with host communities, local and national governments.
The transaction announced today is expected to be finalised in the third quarter of 2023. After that, First Quantum will operate the project through to its feasibility study.
From that point, all expenditures will be applied on a pro-rata basis according to the pair's respective ownership of the project.
Rio Tinto copper chief executive Bold Baatar commented on the new joint venture, saying:
La Granja is an exciting but complex project that has the potential to be a significant new source of the copper that is needed for the energy transition.
This partnership underscores not only La Granja's potential to be a significant copper producer, but Peru's position as one of the world's most important mining investment destinations.
Developing La Granja would also further strengthen Rio Tinto's copper portfolio following the acquisition of Turquoise Hill Resources and commencement of underground mining at Oyu Tolgoi in Mongolia.
Rio Tinto share price snapshot
The Rio Tinto share price has performed well in recent months.
The stock has gained 3% since the start of 2023 and is trading flat year-on-year.
Meanwhile, the ASX 200 has also lifted 3% year to date. Though, it's fallen 4% over the last 12 months.
