Copper explorer Chinalco Yunnan Copper Resources said today it will partner Rio Tinto in a project in northern Chile, making its third such agreement for the region with the mining giant.
A Chilean subsidiary of Chinalco Yunnan will be able to earn a stake in the project by helping fund exploration work, and will have an option to enter a joint venture with Rio.
The Candelabro porphyry copper and molybdenum prospect, is some 60km north of BHP Billiton's Cerro Colorado mine, and covers about 4200ha.
Chinalco Yunnan said the advanced project will be drilled ahead of the Caramasa and Palmani copper prospects in the region, where it also has agreements with Rio to farm-in to the projects.
The company's subsidiary can earn a 40 per cent stake in the Candelabro project with drill work and an investment of $US8 million ($7.5m), including a minimum spend of $US250,000 in the first year, after which Rio will have 90 days to either resume management of the project, or grant the company a further three years to invest $US15m to take its interest to 60 per cent. If Rio maintains its 60 per cent controlling stake, then a joint venture company will be formed between the companies, it said.
Chinalco Yunnan's largest shareholder is a majority-owned unit of Aluminium Corp of China, or Chinalco, which holds a 21 per cent interest and is also Rio's largest shareholder with a 9 per cent stake.
Rio and Chinalco in June formed a joint venture to explore mainland China for copper and other minerals, and the pair is also developing a prospective iron ore deposit in Guinea.
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