Faraday Copper (TSX:FDY) has entered into a non-binding letter with a wholly owned subsidiary of BHP (ASX:BHP), to acquire the San Manuel Project in Arizona.
Under the agreement, both companies will negotiate and enter into a definitive purchase and sale agreement whereby Faraday will acquire the project, subject to obtaining necessary approvals. Faraday intends to issue BHP shares equivalent to a 30% interest in the company.
BHP will also be granted customary investor rights provided it maintains a minimum shareholding requirement. BHP has also agreed to – for a 24-month period following executing the letter of intent – to subscribe for 30% of any Faraday equity raise, up to a maximum of US$20 million ($28.4 million) over the financing participation term.
The closing of the transaction is expected by Q3 2026.
Faraday has engaged TD Securities as its financial advisor and McCarthy Tétrault LLP and Dorsey & Whitney LLP as legal counsel.
CEO Paul Harbidge says this deal provides an opportunity for a “transformative” acquisition as it looks to consolidate two adjacent and complementary assets in Arizona.
“The combined project has the potential to become a multi-generational copper district delivering made-in-America copper, while providing significant economic opportunities to the local communities,” Harbidge says.
“This would allow for the optimisation of infrastructure and minimised environmental footprint compared to each project advancing independently.”
BHP Chief Development Officer Catherine Raw says this deal would support the US objective of greater copper supply chain resilience, alongside economic development in the Pinal County region.
Faraday notes that the proximity of its Copper Creek Project and San Manuel allows for the potential to leverage existing infrastructure and for future facilities to be shared between the projects.
The San Manuel Property, comprising the San Manuel and Kalamazoo deposits, operated as a combined underground block cave and open-pit mine. The combined operation was among the largest underground mines in the US during its operations.
The mine generated more than 4.5 million tonnes of copper between 1955 and 1999.
According to the World Resources Institute, global copper demand is projected to rise by 22% from around 27 million tonnes to roughly 33 million tonnes by 2035, as well as reach up to 37 million tonnes by 2050.
Despite the forecast increase in demand, high-grade ores could become harder to find with aging mines closing. The International Energy Agency reports that global mined copper supply could peak towards the end of the decade at a little over 24 million tonnes, after which output declines noticeably to less than 19 million tonnes by 2035.
The US produces around 850,000 tonnes of refined copper from its own mines, plus an additional 870,000 tonnes in recycling scrap. However, the nation needs around 2.5 million tonnes to meet its own needs and have critical mineral independence, as reported by the World Resources Institute.
The domestic supply chain leaves the US particularly vulnerable to external shocks and export controls.
This news comes amid global law firm White & Case stating in its Mining & Metals 2026 report that copper is expected to be “big winner” in 2026, following strong price growth over 2025 with both commodities outperforming US and European equity indices.
In December 2025, copper hit US$12,000 per tonne following output reductions, led by the loss of hundreds of thousands of tonnes from Escondido, Collahuasi, and Grasberg mines.
At the time of writing, copper futures sat at around US$5.74 per pound. The critical mineral’s price is up nearly 27% compared to the same time last year.
Write to Aaliyah Rogan at Mining.com.au
Images: Faraday Copper
