First Quantum explores Taca Taca stake sale: report

First Quantum Minerals (TSX: FM) is exploring the sale of a minority stake in its giant Taca Taca copper project in Argentina as the world’s largest miners and strategic investors race to secure future copper supply.

The Vancouver-based miner is running a process for the potential sale, Bloomberg reported, citing people familiar with the matter. Potential bidders include Rio Tinto (ASX: RIO) along with Japanese trading houses Mitsubishi Corp. and Mitsui & Co. 

First Quantum and Rio Tinto declined to comment. The process remains at an early stage, and no deal is guaranteed.

Building a project the size of Taca Taca requires enormous capital, making partnerships an increasingly common way to spread development costs and risk. Several miners are looking to bulk up in copper as demand tied to electrification and the energy transition keeps prices near record highs and fuels expectations of future supply deficits.

The potential transaction underscores intensifying competition for large-scale copper assets as miners seek long-life projects capable of supplying an increasingly constrained market. 

Copper hotspot

Argentina has emerged as one of the sector’s hottest investment destinations after President Javier Milei introduced tax, customs and foreign-exchange incentives aimed at attracting mining investment, although infrastructure constraints continue to challenge new developments.

Located near the Chilean border, Taca Taca ranks among the world’s largest undeveloped copper deposits. The project is expected to produce more than 320,000 tonnes of copper annually at peak capacity, or roughly 1.5% of current global mine supply.

First Quantum, widely regarded as one of the mining industry’s strongest project developers, continues to recover from the closure of its flagship Cobre Panamá mine in late 2023 following widespread protests.

Already partners

The company already has an established relationship with Rio Tinto. In 2023, the two companies agreed to jointly develop the La Granja copper project in Peru after First Quantum acquired a majority interest from Rio.

According to First Quantum’s development plans, Taca Taca would require an initial investment of about $4.2 billion (C$6 billion) to support a 40-million-tonne-per-year operation. A future expansion to 60 million tonnes annually would lift total capital spending to about $5.25 billion. The mine is projected to produce about 291,000 tonnes of copper annually during its first decade following expansion across a 35-year mine life.

Construction is expected to create as many as 4,000 jobs, with about 2,000 permanent operating positions once the mine enters production, while supporting regional infrastructure and workforce development.