Nevada Copper starts production at mine in western U.S.

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(Reuters) - Nevada Copper Corp said on Monday it has started production at its Pumpkin Hollow mine in the western United States, one of the first new mining projects to open in the country in decades.

The mine is opening just as copper prices are projected to rise due to increasing demand from the electric vehicle industry. Once seen as a laggard in the global mining industry, U.S. copper deposits have drawn nearly $3 billion in recent investments from small and large miners alike.

Nevada Copper spent about $200 million to develop the underground mine, less than 60 miles (100 km) from Tesla’s massive Gigafactory in the state’s northern edge. The mine is expected to produce about 27,000 tonnes of copper concentrate annually.

The mine’s operating cost of $1.86 per pound is about 49 percent below current copper prices.

The underground mine is expected to operate for about 13.5 years. Nevada Copper plans to finish a feasibility study by the end of next year on whether to construct a nearby open-pit mine. The company controls about 22,000 acres in northern Nevada and says it believes it has expansion potential.

The mine was developed amidst a push by U.S. President Donald Trump and other officials in Washington to boost domestic minerals production to reduce the nation’s reliance on rivals.

Nevada Copper has agreements to supply all of its copper for the next three years to several parties, including commodities trader Transamine Trading SA.

Tesla Inc, SK Innovation Co and other automakers and battery makers are opening or expanding across the United States, facilities that are expected to consume a rising share of copper produced in the country.

Rival miner Rio Tinto Plc said earlier this month it would spend $1.5 billion to expand its Kennecott copper mine in Utah. Glencore Plc took control earlier this year of PolyMet Mining Corp, which is developing a Minnesota copper and nickel mine. And Freeport-McMoRan Inc is spending heavily to build out several Arizona copper mines.

Reporting by Ernest Scheyder; editing by Philippa Fletcher