SYDNEY--U.S. President Barack Obama has signed into law
legislation clearing a land-swap deal that will underpin the
proposed US$6 billion development of one of the world's largest
untapped copper deposits, Rio Tinto PLC (RIO) said Monday.
The Resolution copper project in Arizona, which is 55% owned by
Rio and 45% by partner BHP Billiton Ltd. (BHP.AU), is expected to
be one of the next major investments for London-based Rio Tinto. In
recent years, Rio Tinto has relied on another commodity--iron
ore--for the bulk of its earnings.
The controversial land-swap deal--first proposed nearly a decade
ago, and which Rio said it needed for the project to be
commercially viable--allows for the exchange of 2,400 acres of land
around the deposit owned by the U.S. government for 5,400 acres of
privately owned land held by Rio Tinto subsidiary Resolution
Copper.
"Passage of the land exchange at Resolution will help us
establish the full potential of the resource and provides a clear
road map to commercial development," Rio Tinto copper chief
executive Jean-Sebastien Jacques said in an emailed statement.
Mr. Jacques said the copper market outlook is strong and that
Rio aims to ensure it is able to capitalize on future demand for
the metal, used widely in construction and manufacturing.
"Resolution is a central component of our copper strategy and we
are willing to invest in development over many years to bring
high-quality, long-life copper assets into production," he
said.
Rio Tinto says the deposit is the third-largest known
undeveloped copper resource in the world. The project will now be
subject to a comprehensive environmental and regulatory review
process, it said.
Native American representatives groups, including the National
Congress of American Indians, have argued the federal land in the
Tonto National Forest is a place of worship for the Apache and
Yavapai people, and is home to ancient settlements and burial
sites.
According to the project website, Rio Tinto expects to be
producing copper from the deposit--which is nearly 7,000 feet deep,
or five Empire State Buildings below the Earth's surface--in the
mid-2020s.
The site could produce around 500,000 metric tons of copper a
year, according to the website. Output at that level is enough to
meet one-quarter of annual U.S. copper demand, said Rio, which
estimates the resource could last for more than four decades.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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