Ivanhoe Electric Inc. is in advanced talks with prospective buyers for copper from its Santa Cruz project in Arizona, as the rapid expansion of data centers and power grids drives demand for the metal. Chief Executive Officer Taylor Melvin said in an interview Thursday that interest has come from traditional traders as well as potential strategic partners seeking supplies for US industries, though he declined to name those involved.
The race to build out infrastructure for artificial intelligence has tightened copper supplies globally, with prices hovering near all-time highs. Ivanhoe Electric, founded by mining billionaire Robert Friedland, is working with the US government's export credit agency on as much as a $1.1 billion debt financing package for the site. Melvin said the company is also discussing project financing with about a dozen commercial banks. Offtake deals for Santa Cruz could include financing.
Largest cloud-computing providers with copper-intensive needs are already looking to lock in future supplies. Earlier this year, Amazon.com Inc. agreed to buy copper produced using Rio Tinto Group's proprietary leaching technology from a Gunnison Copper Corp. mine in Arizona, destined for Amazon data centers. Santa Cruz will use a relatively novel on-site process to produce copper cathode, bringing buyers one step closer to wire, cable and foil, Melvin said.
The initial phase of the mine is expected to cost $1.4 billion, with first output targeted for 2029. Combined with nearby resources, Santa Cruz has the potential to become one of the top US copper-producing regions, Melvin said.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing