In 2021, Hudbay announced a notable discovery at its Copper World properties in Arizona. The drill program revealed the intersection, at shallow depth, of high-grade copper sulphide and oxide mineralization, on our wholly owned patented mining claims. Since then, expanded drill programs and the completion of preliminary economic studies have defined a resource at Copper World that is poised to contribute significantly to our future growth.
Copper World is located approximately 45 kilometres southeast of Tucson in the northern Santa Rita Mountains. It incorporates the East deposit and the newly discovered adjacent deposits. Companies have been mining for copper in this area since the 1880s, and the region certainly contributed to Arizona’s designation as the Copper State. Today, due to the modern mining and processing techniques we use, we can access copper resources more productively, economically, safely and sustainably than any of the mines that came before us.
In June 2022, Hudbay released the findings of our preliminary economic assessment (PEA) of Copper World, and the results were very positive and encouraging. The PEA proposes a two-phase mine plan. Phase one incorporates a stand-alone operation with processing infrastructure on Hudbay’s private land and mining taking place on patented mining claims. We believe phase one will require state and local permits only, and we project a 16-year mine life. Subsequently, with phase two, we propose expanding onto federal land to access all deposits. Phase two will be subject to federal permitting, and the expansion will extend the mine life to 44 years.
We took our first step in the state-level permitting process with an application for our Mined Land Reclamation Plan (MLRP) for Copper World. Subsequently, we received approval from the Arizona State Mine Inspector. In late 2022, we submitted applications for the two remaining state-level permits, the Aquifer Protection Permit and the Air Quality Permit, with the Arizona Department of Environmental Quality. We expect to receive these state permits in 2023.
We look forward to potentially starting construction of phase one of Copper World in 2025 and initiating production by 2028. We strive to be energy efficient and minimize the environmental impact of all our operations. From that baseline, Copper World will likely be the first major development planned and constructed subsequent to the release of our 2030 Greenhouse Gas Reduction Commitment and Net Zero Commitment for 2050. All new acquisitions and projects will be assessed against our corporate emissions targets. We are also considering approaches to on-site processing that will enable us to remove sulphur from tailings, rendering them non-acidic and creating our own sulphuric acid on-site for use in the heap leaching process. Sulphuric acid can also be used as a fuel for steam turbines as part of a climate-neutral approach to generating electricity.
Producing copper cathode on-site at Copper World will also reduce energy consumption. Initial production from Copper World has the potential to be shipped overseas as copper concentrate, where it will be processed into metallic copper. Copper concentrate is about 30% copper, and the remainder is typically a mix of iron and sulphur.
However, our goal for phase one is to move as quickly as possible to making finished copper on-site, using a Solvent Extraction and Electrowinning (SX/EW) process that produces copper cathodes. By making copper cathodes on-site at Copper World, in a jurisdiction with strong environmental regulations complemented by Hudbay environmental policies and commitments, we will reduce transport and handling and provide companies in the United States with access to an environmentally responsible “Made in the USA” product.