Toronto-based Hudbay Mineral’s planned joint venture with Japanese mineral resources company Mitsubishi Materials undercuts Hudbay’s public relations campaign that Copper World is “designed to deliver finished copper directly to U.S. customers”. 

 

Hudbay announced last week that Mitsubishi will invest $600 million in the Copper World project. The investment will allow Mitsubishi to export 30% of Copper World’s projected production of 85,000 tons per year of unrefined copper concentrate.

 

"Mitsubishi will have rights to 30% offtake,” Hudbay President and Chief Executive Officer Peter Kukielski said in an Aug. 13 conference call with stock analysts.

 

Mitsubishi is investing in copper mines worldwide to sharply increase access to copper concentrate that the company imports into Japan where it is processed at its two smelters into refined metal.

 

“Mitsubishi Materials has set a target of increasing the volume of secured copper concentrate from the current 150,000 tons to over 500,000 tons by FY2030,” the company states on its website. “This will be achieved through participation in new medium-scale copper mines and other measures.”

 

The Mitsubishi deal comes at the same time Hudbay is attempting to deflect criticism that Copper World will destroy the northern half of the Santa Rita Mountains, obliterate the headwaters for two watersheds, pollute the air, deplete the groundwater, and leave behind a mountain of toxic mining waste to export copper overseas.

 

The company is attempting to justify the environmental destruction by proclaiming that “Copper World will help ensure a strong domestic supply to meet the needs of the American people.”

 

Despite its marketing spin, Hudbay plans to export all of Copper World’s copper concentrate production during at least the first four years of operations. The reason is simple: There is no place in the United States where Hudbay can send Copper World’s copper concentrate to be processed into refined metal.

 

There are only two operating U.S. copper smelters, and they are at capacity. The lack of smelting capacity is resulting in domestic copper mines exporting one-third of the unrefined copper mined each year, according to the U.S. Geological Survey’s 2025 copper report.

 

For the last two years, Hudbay has repeatedly touted plans to install a $400 million “concentrate leaching” technology that purportedly would allow it to produce finished copper onsite that would then be sold to American industry. But the company is in no hurry to install the technology. Hudbay says it “contemplates” producing finished copper beginning in the fifth year of production.

 

Hudbay has announced it expects to use Glencore Technology’s Albion Process to produce finished copper from Copper World’s sulfide ore that usually requires smelting. Glencore developed the Albion technology in the early 1990s, but it has not been used at a major copper mine anywhere in the world to produce refined copper.

 

Pressed by analysts on why Hudbay has not included the Albion Process at the beginning of the Copper World project rather than waiting until in the fifth year, Kukielski said the timing “needs to be properly studied” in a final feasibility study that is expected to be released in mid-2026.

 

“But at this point, we are saying that Albion will be coming to production separately, will be part of a separate (cost) estimate,” Kukielski told analysts. In other words, Hudbay has kicked the Albion can down the road.

 

Hudbay’s hedging on its Albion investment comes when there is a worldwide surplus of copper smelting capacity, which is driving down the cost to refine copper concentrate in overseas smelters. Many of these smelters are located in China, which operates eight of the 20 largest copper smelters in the world and refines nearly 10 times more copper than the United States.

 

Kathleen Quirk, the CEO of Phoenix-based Freeport McMoRan told Bloomberg News in a June 19 report that the cost of processing copper in the United States is three times the cost of processing it overseas. Freeport is the largest copper mining company in the United States.

 

Freeport owns or co-owns three smelters globally, including a new one in Indonesia, which came about only after the government there ordered mining companies to build domestic processing plants as part of a government-led push to onshore its minerals supply chain, according to Bloomberg.

 

Indonesia “saw all their materials going out of the country, and they wanted to capture downstream value,” Quirk told Bloomberg. But “unless you’re compelled to build one—unless the government says you have to do it—you’re just going to be economically incentivized to export.”

 

Mitsubishi’s $600 million investment in Copper World is a prime example of the strong economic incentive to export copper, despite Hudbay’s claims that the mine “will ensure a strong domestic supply to meet the needs of the American people.”

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John Dougherty

SSSR Executive Director