By Rhiannon Hoyle
BHP Group said it has signed a definitive agreement with Faraday Copper that aims to revive the historic San Manuel copper mine in Arizona and bolster U.S. copper supply.
Under a deal first flagged in February, Faraday will acquire BHP's San Manuel property, once the largest underground copper mine in the U.S. In exchange, BHP will receive shares equivalent to a 30% stake in Faraday, as well as offtake rights, Australia-based BHP said.
The companies want to explore restarting the San Manuel mine, which closed in 1999 amid a downturn in copper prices, and combining it with Faraday's nearby Copper Creek project to create a new copper-mining hub.
"Consolidated development will support future investment, employment opportunities, and help advance domestic U.S. copper supply," said BHP. The project remains subject to further technical work and regulatory approvals, it said.
The deal reflects BHP's pursuit of more growth in copper, a metal it expects will be in demand for decades to come because of low-carbon technologies and the data-center buildout, among other things.
New chief executive Brandon Craig, who succeeded Mike Henry on Wednesday, said in May that one of his priorities as CEO "will be ensuring we have options to grow well beyond 2035."
The deal for San Manuel will increase BHP's holding in Faraday to more than 32%, after the giant miner acquired shares via a private placement in March.
The transaction expected to be completed in the quarter ending Sept. 30, BHP said.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com