Rio Tinto is committing $144 million to advance the Resolution Copper project in Arizona, funding additional drilling, engineering and infrastructure work. The company says long-term copper demand is being driven not just by AI and data centers, but also electrification and everyday appliances, as the project moves toward key permits and a future investment decision.Vicky Peacey, president of Resolution Copper joins Bloomberg Open Interest to talk about the deal and what's ahead.
At what point, you have the capital, you have some of the permitting. at what point does this stuff actually come out of the ground?
Well, that's so that's what we're really doing today, right? Is 144 million is really looked to take that next step in progressing the project. And so we're looking at long lead time um items and and final engineering for those items plus so it's really things like power components, transformers, switch gear, uh underground mining equipment. We've got some trains, we're going to be hiring as well. So I think it's actually an exciting next step towards that.
And with copper prices at a record high, are Rio Tinto and BHP ready to commit billions into building this?
Well, so, you know, obviously we're a long-term business, right? And so we're taking the steps, right? The historic land exchange just happened uh in in March and we've been waiting a very long time to do that. So we took that first step of investment of of half a billion dollars right to get additional data, um drilling on the surface, drilling underground. We're starting to um do tunnel scale development as well. and this is the next step towards that where we have to collect data, we have to do some of this engineering for long lead time items and that puts us on that path.
Can can you talk about again, you know, this idea like you're not just attached to the AI. because I think a lot of people have gotten excited about copper around this idea that it's an AI trade. What where are the different places that demand is coming from that you will be meeting once you start to get this copper out of the ground?
Yeah, no, Danny, that's a good point. So we're we're a long-term business, right? So we've been in in and around for a very long time. This is going to be decades of of production over a very, very long time. And so it's it's obviously the phones, right, the televisions, it's in everything that is electrified because copper is the metal of electrification. And um washers, dryers, freezers, cars aren't going away anytime soon and so those demands um will continue.
So those are well- noted, but to Danny's point, how much of your investment case is dependent on this massive boom in AI?
Well, if you look at if you go back to S&P um Global, right, there's a lot of demand factors that and those are continuing to increase. If you look at the developing world, they haven't even electrified yet. and that's a demand that we really probably haven't quantified enough. um as well as the business as usual. So I think strong demand uh continues um, you know, with a lot of different demands uh coming online.
I I do have a viewer writing in that's specifically interested about tariffs because we did have a blue wave coming in. even had Ted Cruz saying that tariffs are part of the reason they lost. You have any sense of where this administration moves with Section 232 copper tariffs and that proposal?
I really don't. We're not focused on that at all, right? I mean, we're we are sort of again, a long-term business. We there will be two to four-year election cycles that will continue throughout the decades that we will have operations. And so, really, again, going back to this 144 million, it's making sure we finalize the the details of the data collection, the engineering, uh and then put forward, you know, at some point a future investment case. We also have to still navigate um state permits and approvals. So we still have a little ways to go. Um but again, long-term business, long-term outlook is is strong.
But does this this current election outcome change the way you expect government level and the government support will be for your business?
No, I mean, I think there's bipartisan recognition that um, you know, we've we've we are at a copper deficit, a 30-year copper deficit. We have the resources here. Um you can see we are a bipartisan project, right? The land exchange passed um in 2014 in a bipartisan lands bill. It was signed in into law by President Obama. Obviously, he's been through a number of administrations. We've worked with career level staff uh at both the federal and the state level for many, many years. We plan to continue to do so. And then really focus, right on the investment of the 500 million, the 144, working closely with local communities, local hiring. Um that's what we're focused on.
