Chilean mining company Antofagasta PLC has declined an opportunity to take a bigger financial stake in the Twin Metals project near Ely, MN. The move means the company—which has invested more than $200 million in the joint venture so far—will pass up the chance for a controlling stake in the project, and operations will revert to junior mining company Duluth Metals.
The announcement comes just before the release of a Pre-Feasibility Study for the project, which will include detailed information about the project’s proposed operations and finances. Highlights of the study will be released later in July, and the full study will be published 45 days later.
In a statement, Antofagasta CEO Diego Hernandez said the company believes Twin Metals has promise, but “our focus is on prioritizing projects with the highest value and lowest risks within our portfolio.”
Duluth Metals has 180 days to buy out Antofagasta’s remaining 40 percent stake. The company affirmed in a statement that it still plans to move the project ahead.
“Duluth Metals is excited about moving the TMM Project through its next phase of project development and continuing to work together with Antofagasta,” stated Christopher Dundas, Executive Chairman.
According to mining news publication Northern Miner, industry analyst Tom Meyer told investors, “The way forward for Duluth is unclear at this time. We strongly believe the project has merit, but our view is informed only by the limited disclosures since the 2009 scoping study. The timing of Antofagasta’s departure ahead of the public release of the prefeasibility also gives us pause.”
The proposed Twin Metals mine would be located along the South Kawishiwi River and Birch Lake, near the intersection of Highway 1 and the Spruce Road, 10 miles southeast of Ely. It would be located within a few miles of the edge of the Boundary Waters Canoe Area Wilderness. The Friends of the Boundary Waters Wilderness reacted to the announcement by saying it raises significant questions about the future of the mine.
“This really will change the dynamics about this issue. It has to. It’s going to become a challenge for Duluth Metals to find financing. That’s going to change how this issue moves forward,” Friends of the Boundary Waters Wilderness spokesman Aaron Klemz told the Associated Press.