Hudbay’s Copper World draws Mid-East, Japanese interest for 30% stake

Canadian miner Hudbay Minerals (TSX, NYSE: HBM) is in talks with investors from Saudi Arabia, the United Arab Emirates and Japan to sell a minority stake in its flagship Copper World project in Arizona, Bloomberg reported.

CEO Peter Kukielski told Bloomberg he met with several key interested parties in Saudi Arabia in November. The sale process is expected to conclude within six months, with Toronto-based Hudbay planning to sell up to 30% of the project.

Among the potential investors is Manara Minerals Investment, a joint venture between Saudi state mining company Ma’aden and the government’s Public Investment Fund, though Manara hasn’t confirmed its interest. According to Kukielski, the project has attracted interest from Japanese trading houses.

Shares in Hudbay Minerals in Toronto were flat Thursday afternoon at $11.96 apiece, giving the company a market capitalization of $4.73 billion.

Copper rush

U.S. President Donald Trump’s threats to impose tariffs on foreign copper imports have incentivized domestic investment in the metal. Last month, Trump ordered the Commerce Department to investigate U.S. copper imports, with a report seen as likely justification for tariffs.

Since then, U.S. copper prices have surged as traders rushed to ship the red metal to the U.S. ahead of potential duties. On Thursday, copper prices on the London Metal Exchange rose as much as 0.6% to $10,046.50 per tonne, while prices on New York’s Comex traded near a record high.

Arizona focus

Hudbay Minerals’ proposed 85,000-tonne-per-year Copper World project in Arizona is now fully permitted.

In January, the miner announced that the Arizona Department of Environmental Quality had issued its air quality permit. Combined with earlier approvals for aquifer protection and land reclamation, permitting is completed.

The company is now focusing on finishing a definitive feasibility study (DFS) with an internal rate of return (IRR) greater than 15%. It’s due to be completed in next year’s first half.

According to Hudbay, Copper World is expected to increase the company’s annual copper production by over 50%.

An updated prefeasibility study for Copper World’s first stage estimates an after-tax net present value of $1.1 billion (at an 8% discount rate) and an IRR of 19%, based on a copper price of $3.75 per pound.