Rio Tinto has agreed to purchase Pan American Silver’s stake in Agua de la Falda S.A. (ADLF), a company with exploration tenements in Chile’s prospective Atacama region, and to enter a joint venture with Corporación Nacional del Cobre de Chile (Codelco) to explore and potentially develop Agua de la Falda’s assets.

Aqua de la Falda started as a joint venture between Codelco and Canadaa-based Yamana Gold. Pan American acquired its interest in ADLF through its acquisition of Yamana earlier this year. Pan American Silver produces silver, gold, zinc, lead, and copper through mines across the Americas. Codelco is a Chilean state-owned copper mining company formed in 1976 from foreign-owned copper companies that were nationalized in 1971.

Under the agreement, Rio Tinto will acquire PanAmerican Silver’s 57.74% operating stake in Agua de la Falda for $45 million and the grant of new smelter returns royalties. Rio Tinto will also acquire 100% of nearby concessions known as the Meridian Property for $550,000 and the grant of new smelter returns royalties.

Codelco, the world’s largest copper producer, holds the remaining 42.26% of Agua de la Falda.

Copper is critical for the global energy transition, which is at the heart of Rio Tinto’s strategy, and Chile is one of the most important sources of world supply as demand for copper in renewables and electrification grows. Partnerships are essential to find better ways to provide materials the world needs, and we are pleased we can bring our global exploration capability to a joint venture that will be able to access Codelco’s strong local presence and industry expertise.

Although this is an early-stage exploration project, we are very excited to be actively exploring in Chile in partnership with Codelco.

—Rio Tinto Chief Executive Jakob Stausholm

The joint venture builds on an underground mining collaboration agreement between Rio Tinto and Codelco signed on 12 October 2022, aimed at encouraging innovations and technology to improve safety, productivity and environmental, social and governance (ESG) outcomes.

Agua de la Falda has previously been explored for precious metals with minimal modern exploration for copper. Analysis by Rio Tinto Exploration indicates it is prospective for new copper discoveries, which will now be the focus of the joint venture.

According to the USGS, the Atacama Desert has large deposits of copper, gold, silver, and other industrial metals. The area is home to the Chuquicamata Mine: the world’s largest open pit copper mine and the second deepest open pit. Previously part of Anaconda Copper, the mine is now owned and operated by Codelco.