Duluth Metals, the company leading plans to build a $2.5 billion copper mine in Northeast Minnesota, will be sold to its project partner Antofagasta for $85 million.
The Toronto-based company announced on its website on Monday that it had entered into a "binding agreement" that will see the Chilean-mining giant assume full control of the company. Shares in Duluth Metals soared 480 percent following the announcement, Stockhouse reports.
The sale also means Antofagasta will take full control of St. Paul-based Twin Metals Minnesota (TMM), the company behind controversial plans for a massive copper mining project near Ely, Minnesota.
These plans have been met with opposition from locals who fear the impact it will have on visitor numbers to nearby wilderness areas and Superior National Forest, according to MPR.
The future of the project appeared in doubt earlier this year, and a lack of faith among investors caused Duluth Metals stocks to plummet, MPR notes.
But following the acquisition, Antofagasta has indicated it will be looking to get the project off the ground, with CEO Diego Hernandez saying on the company's website: "The acquisition of Duluth provides Antofagasta with a long-term option to develop a large polymetallic resource in a stable and proven mining region.
"We believe that the Duluth Complex is an attractive deposit and upon closing of the offer we will commence the process of re-evaluating the project’s design while also continuing with the permitting activities."
Twin Metals Minnesota is 60 percent owned by Duluth Metals, with Antofagasta owning the remaining 40 percent. It owns 40,000 acres of property interests on the northern edge of Minnesota's "Iron Range".
According to MPR, the area around Ely - a few miles south of the Boundary Waters Canoe Area Wilderness - could be hiding as much as $100 billion-worth of untapped copper and other precious metals. It is anticipated that building the TMM mine would create 3,500 construction jobs and 850 permanent jobs.
Details of a pre-feasability study released in August revealed that the TMM project would focus on two sites, nine miles southeast of Ely and 11 miles northeast of Babbit, and would see 50,000 short tonnes of ore mined each day over 30 years to produce marketable copper and nickel, according to the Hibbing Daily Tribune.
Duluth Metals president and CEO Kelly Osborne described the planned mines as "one of the most compelling greenfield copper-nickel development projects in the world."
A tale of two mining projects
The TMM project is of much greater size than another controversial project for a copper and nickel mine in an area of rock formations known as the Duluth Complex, put forward by Polymet.
Polymet's Northmet project would involve the mining of of forest land near Hoyt Lakes, producing 32,000 short tonnes of ore a day over 20 years, compared to the 50,000 tonnes a day mined by TMM.
But it has also had locals divided over the potential boost it would bring to the local economy and the effect it would have on the picturesque surroundings, the Star Tribune reports. We have taken a look at how the two projects compare:
Cost of project: $2-$3 billion.
Number of jobs created: 3,500 construction, 850 permanent.
Amount of ore mined: 50,000 tonnes a day.
Duration of mining: 30 years
Metals produced: Copper, nickel, platinum, palladium, gold and silver.
Cost of project: $700 million.
Number of jobs created: 360 permanent, 600 indirect.
Amount of ore mined: 32,000 tonnes a day.
Duration of mining: 20 years.
Metals produced: Copper, nickel, cobalt, other precious metals.