Rio Tinto and Codelco strengthen alliance to revive mining project in northern Chile

Anglo-Australian multinational Rio Tinto looks to reinforce the alliance it has with Chilean state copper company Codelco to revive an old mining project at the Agua de la Falda deposit in northern Atacama region.

The two companies will be partners in a joint venture to develop exploration in the area due to the potential for copper, as well as precious metals such as gold and silver.

For US$45mn, Rio Tinto will acquire the 57.7% stake in Minera Meridian from Canada's Pan American Silver, acquired following its purchase of Yamana Gold, according to a statement.

Codelco, meanwhile, has owned 42.26% of Agua de la Falda SA since 1996. The firm created that year was producing gold until 2002 at the underground deposit Agua de la Falda, and the El Hueso open pit mine.

The project was finally withdrawn in 2016, after an attempt was made to restart activity under a US$423mn plan.

Confident in identifying prospective new copper discoveries thanks to its exploration team, the London-based giant also decided to purchase the mining concessions registered under Minera Meridian for US$550,000, Rio Tinto added.

According to an exploration report, Meridian had 171ha of exploration concessions and 170ha of mining concessions as of 2021.

Last year Rio Tinto disbursed close to US$900mn on exploration, and the Chilean state company US$81.5mn, both focusing mainly on copper.

“Projects that require medium-term decisions have been prioritized,” Rio Tinto CEO Peter Cunningham said in last year's annual report.

This new project reinforces the public-private alliance between Rio Tinto and Codelco, since they have a collaboration agreement in place in matters of innovation, safety, technology, operational performance, productivity and ESG criteria to promote "a next generation of mining projects underground,” the state company said in October.

Along these lines, Annette Benavides, senior manager of human capital at consultancy Deloitte, told BNamericas that collaboration is an increasingly common practice among large mining companies. "Before there was talk of a social license to operate, today we see how mining companies have a greater concern for sustainability and ESG parameters, including the internal part of companies: governance, boards, committees and the administration."

Benavides highlighted that "every corporation today has the obligation to report its parameters in these three axes. ESG is no longer just a compliance issue in numerical terms, but rather a general context of how we complement each other and give sustainability to activities, reforming the purposes towards the future."