Rio Tinto's Resolution copper project in Arizona moves step closer

LONDON (Reuters) - Rio Tinto on Friday said it had moved a step closer to the development of a new copper project in Arizona, one of the few new major known deposits of the metal, with the potential to meet around a quarter of U.S. demand.

FILE PHOTO: A sign adorns the building where mining company Rio Tinto has their office in Perth, Western Australia, November 19, 2015. REUTERS/David Gray/File Photo

Miners have been scouring the globe for sources of copper - a mineral they predict will be in high demand as the world shifts toward renewable power and electric vehicles.

Resolution Copper, 55% owned by Rio Tinto and 45% by BHP, has spent years waiting for clearance from U.S. authorities to develop the underground mine.

On Friday, Rio Tinto said a 90-day public consultation would begin now that the U.S. States Forest Service had released a draft environmental impact statement (DEIS) following a six-year review of the planned mine.

The in-depth review lays out the environmental challenges, solutions to them and benefits of the mine and is part of the final regulatory phase the project needs to clear.

Arnaud Soirat, Rio Tinto’s chief executive for copper and diamonds, said in a statement the publication of the DEIS was “a major permitting milestone” and the mine could meet up to 25% of U.S. copper demand.

Estimates so far suggest it could produce 40 billion pounds of copper over a 40 year-period.

U.S. Forest Service documents also say that minerals on the U.S. critical minerals list such as cobalt, manganese and vanadium could be present in “elevated concentrations” at Resolution.

Rio Tinto and BHP will have spent more than $2 billion to develop and permit the project by 2020, which is the deadline for the Forest Service to produce a final environmental impact survey.

Resolution can then come up with a finalised mine design, which could take several years, and begin construction.

U.S. President Donald Trump has emphasized the need for the United States to develop its own resources as he stokes trade tensions with China.

All commodity markets have come under pressure from the U.S. trade dispute with China but Soirat said long-term copper market fundamentals were strong.

“Rio Tinto will be well positioned to benefit from this demand outlook and to provide North American manufacturers with the materials that are essential to their products,” he said.

Mining projects notoriously take longer than expected and Rio Tinto’s share price has been hit by delays at its giant underground copper expansion project Oyu Tolgoi in Mongolia.

(This story was republished after the company corrected figure to 40 billion pounds in paragraph 7)

Reporting by Barbara Lewis; Editing by Kirsten Donovan