Canada-based Hudbay Minerals has struck a $600-million deal with Mitsubishi, giving the Japanese conglomerate a 30% stake in its fully permitted Copper World project in Arizona, in a move that secures a long-term partner and significantly reduces Hudbay’s upfront funding needs.

The agreement, announced on Wednesday, involves Mitsubishi paying $420-million at closing and an additional $180-million within 18 months. The company will also fund its pro-rata share of future capital costs, deferring Hudbay’s first capital contribution until at least 2028 and trimming its expected outlay to about $200-million based on prefeasibility study (PFS) estimates.

“Securing Mitsubishi as a 30% partner in Copper World is an important milestone for Hudbay as we establish a long-term strategic partnership to advance this high-quality copper project towards sanctioning and to unlock significant value in our copper growth portfolio,” CEO Peter Kukielski said in a statement.

“After a highly robust and competitive process, we have selected the premier partner of choice in Mitsubishi. Through this partnership we will leverage our complementary strengths to deliver our world-class Copper World project, produce domestic copper in the US for the US critical minerals supply chain and create value for all our stakeholders.”

For Mitsubishi, the investment expands its presence in one of the largest copper-consuming markets and fits into its strategy of securing stakes in high-quality, long-life assets.

“Participation in Copper World is of significant strategic importance for Mitsubishi towards the realization of its growth strategy within the copper sector,” said Taro Abe, COO of Mitsubishi’s Critical Minerals division. “We are pleased to collaborate with Hudbay, whose operational and development expertise is well-recognised and proven, to advance a definitive feasibility study (DFS).”

Copper World, discovered in 2021 and located about 50 km south-east of Tucson, in the US, is forecast to produce 85 000 t/y of copper for 20 years in its first phase, with potential expansion in a second phase requiring federal permits. Hudbay says the project represents a $1.5-billion direct investment into the US critical minerals supply chain, which has been a policy priority for Washington amid concerns over foreign dependence for key raw materials.

The company expects construction to create more than 1 000 jobs a year over three years, with letters of commitment from seven US labour unions. Once operational, the mine would provide 400 direct jobs and about 3 000 indirect jobs in Arizona, while contributing more than $850-million in US taxes.

Hudbay, the fourth-largest copper producer listed on the NYSE, sees Copper World boosting its consolidated copper production by more than 50% once in production.

FINANCING PACKAGE
Alongside the Mitsubishi deal, Hudbay reached a non-binding agreement with Wheaton Precious Metals to amend an existing streaming arrangement covering gold and silver output from Copper World. The revision includes a contingent payment of up to $70-million linked to potential mill expansion, and changes ongoing payments from fixed pricing to 15% of spot prices, offering more exposure to rising precious metals markets.

The Mitsubishi transaction is expected to close in late 2025 or early 2026, pending regulatory approvals. Hudbay aims to complete a DFS by mid-2026, moving toward a final sanction decision later that year.