PolyMet Mining Corp (POM.TO) and Teck Resources Ltd (TECKb.TO) said on Wednesday they will form a joint venture to develop their Minnesota copper and nickel mining projects.
The new company, known as NewRange Copper Nickel LLC, will share costs to develop the two proposed mines, which aim to produce metals used to make electric vehicles and other green technologies.
“This partnership just seemed like a natural fit,” PolyMet Chief Executive Jon Cherry said in an interview. “It’s a great opportunity for northern Minnesota to really become the central point of production for electric vehicle battery metals.”
Cherry said the JV will benefit from Teck’s technical experience in building mines and PolyMet’s experience in obtaining U.S. mine permits.
Shares of St. Paul, Minnesota-based PolyMet jumped 10.1% on Wednesday, while shares of Vancouver, British Columbia-based Teck were down 2.2%.
PolyMet’s NorthMet project is slated to cost about $1 billion and is the most advanced of the two proposed mines, as it has received all of its permits, though three are being challenged in court. Teck’s Mesabi project has yet to be fully studied and is not permitted.
Both projects are located in Minnesota’s Iron Range region, which has a long history of mining taconite ore. The area is about 150 miles (241 km) south of Minnesota’s Boundary Waters region, where Antofagasta Plc’s plans to build the Twin Metals copper mine were recently dashed by U.S. President Joe Biden.
Teck and PolyMet have agreed to fund the JV with an initial budget of $170 million for permitting and engineering work.
Teck mines zinc, copper and a range of metals in Canada, Chile and Alaska. PolyMet does not plan to focus on developing other mines, Cherry said.
Glencore Plc (GLEN.L), PolyMet’s largest shareholder, will fund up to $105 million of PolyMet’s share of the JV’s costs and may boost its stake in PolyMet from 71% to about 78%, PolyMet said.