Mitsubishi Invests $600 Million in Hudbay’s Copper World Project

2026-01-12 companies

Toronto, Monday, 12 January 2026.
Hudbay closed a $600 million joint venture with Mitsubishi on January 12, 2026. This strategic move de-risks the Copper World project while boosting projected returns to approximately 90%.

Deal Structure and Financial Impact

The transaction involves an immediate cash contribution of approximately $420 million from Mitsubishi to Copper World LLC upon closing [1][2]. To fulfill the total $600 million commitment, Mitsubishi is obligated to contribute the remaining $180 million within the next 18 months [1][3]. This capital injection is specifically allocated to fund definitive feasibility study costs, pre-sanction costs, and initial project development expenses [2]. Importantly, this joint venture significantly optimizes Hudbay’s balance sheet; the company’s estimated share of remaining capital contributions for the project has been reduced to approximately $200 million [2]. This follows a strong fiscal position reported by Hudbay, which held cash and cash equivalents exceeding $600 million and a net debt to adjusted EBITDA ratio of 0.5x as of September 30, 2025 [2].

Enhancing Project Economics

The partnership with Mitsubishi dramatically alters the economic profile of the Copper World asset. Based on pre-feasibility study estimates, the joint venture increases the project’s Internal Rate of Return (IRR) to Hudbay to approximately 90% [1][2]. This valuation uplift occurs against a backdrop of robust commodity pricing, with copper trading at approximately $6.02 per pound [5], significantly higher than the $3.75 per pound price assumed in the company’s September 2023 Preliminary Feasibility Study [1]. Peter Kukielski, Hudbay’s President and Chief Executive Officer, described the closing as the beginning of a long-term strategic partnership and a critical growth milestone for the company [1][2].

Timeline to Production

With funding secured, Hudbay is adhering to an aggressive development timeline. The company expects to complete the Definitive Feasibility Study (DFS) for Copper World in mid-2026 [2]. Following the DFS, the partners anticipate making a formal sanction decision later in 2026 [1][2]. The project is a cornerstone of Hudbay’s growth strategy, designed to increase the company’s consolidated copper production by more than 50% [4]. Mitsubishi’s involvement extends beyond the initial investment; the trading house will fund its pro-rata 30% share of future equity capital contributions required to construct the mine [1].

Market Context and Valuation

The market has responded favorably to Hudbay’s strategic initiatives over the past year. As of early 2026, the company has delivered a total shareholder return of 126.21% over the preceding 12 months [4]. Despite this appreciation, the stock trades at a Price-to-Earnings (P/E) ratio of roughly 18.1x, which represents a discount of approximately 20.614 percent compared to the Canadian Metals and Mining industry average of 22.8x [4]. This transaction solidifies Hudbay’s status as a diversified copper producer, complementing its existing operating portfolio that includes the Constancia mine in Peru, the Snow Lake operations in Manitoba, and the Copper Mountain mine in British Columbia [6].

Sources

Copper mining Strategic partnership