Diversified miner BHP on Tuesday announced a strategic move to expand its copper portfolio by jointly acquiring, with Lundin Mining, an advanced-stage copper exploration project in South America.

The two companies also announced that they would form a joint venture (JV) to jointly develop an emerging copper district in the Vicuna belt of Argentina and Chile.

Copper is highly sought after by miners, owing to the crucial role that the metal plays in the energy transition. BHP’s unsuccessful bid to acquire Anglo American earlier this year was driven by its strategic aim to increase its copper exposure.

In terms of the transactions, BHP and Lundin Mining will jointly acquire Filo, which owns the Filo del Sol (FDS) project, for C$4.1-billion, or C$33 a share.

The companies will then create the JV, each contributing their respective 50% interests in FDS and the Josemaria project. BHP will acquire 50% of the Josemaria from Lundin for $690-million.

BHP CEO Mike Henry commented that the transaction aligned with BHP's strategy to acquire attractive early stage copper projects.

"The proposed transaction builds on a multi-year relationship between BHP and the Lundin Group of companies through which we have developed a strong understanding of the resource potential of the Vicuña district and the possible pathways for development of the Filo del Sol and Josemaria projects.”

Henry added that the Vicuña district offered the potential to become a major contributor to the Argentina economy for decades to come.

Lundin Mining president and CEO Jack Lundin added that the strategic acquisition was key to unlocking the value that the Vicuña district represented.

“As we partner to acquire Filo del Sol, one of the world's largest undeveloped copper/gold/silver deposits, with its true size yet to be defined, we are very excited about the future of the company and our role in developing this region. Combined with the Josemaria project, we are now positioned to create a multi-generational mining district with significant synergies and cost savings on a scale that has the potential to become one of the world's largest of its kind,” said Lundin.

“Importantly, we gain a valued partner in BHP and together we aim to generate long-term value through combining complementary skills and experiences, foundational to our near-term goal of becoming a top-tier copper producer.”

The closing of the transaction is expected to occur in 2025.