What is the Santa Cruz Copper Project?
The Santa Cruz Copper Project represents one of the most promising copper developments in the United States, strategically positioned to address critical mineral supply concerns. Located in Arizona, the project encompasses 5,975 acres of private land complete with associated water rights – a significant advantage in the arid Southwest where water access often presents development challenges.
The project boasts substantial mineral resources, with indicated resources of 226.7 million tonnes grading 1.24% total copper and inferred resources of 149 million tonnes also grading 1.24% total copper. These impressive resource figures place Santa Cruz among the top-tier copper deposits in North America, comparable to other major projects like Resolution Copper (1.5% Cu) but with fewer permitting hurdles due to its location on private land.
Fluor, a global engineering and construction leader with extensive mining project experience, serves as the project lead for development. Their expertise in large-scale mining operations provides technical credibility to the project's development timeline and operational feasibility.
Project Timeline and Development Status
The Santa Cruz Copper Project is advancing on a well-defined timeline, with the preliminary feasibility study expected to be completed by June 2025. This comprehensive study will outline the technical and economic parameters for mine development, processing facilities, and environmental management systems.
Initial construction is scheduled to commence in the first half of 2026, positioning the project to potentially begin production by late 2028 or early 2029 – a timeline that aligns with projected increases in copper demand driven by renewable energy expansion and electrification initiatives.
In a significant milestone, Ivanhoe Electric secured 100% ownership of the mineral rights in August 2024 after making the final $10 million payment. This complete ownership provides Ivanhoe with full control over project development decisions and future revenue streams.
How is EXIM Bank Supporting the Santa Cruz Project?
Proposed Financing Structure
The Export-Import Bank of the United States (EXIM Bank) has issued a letter of interest for up to $825 million in debt financing for the Santa Cruz Copper Project. This substantial financial commitment underscores the strategic importance of domestic copper production to U.S. economic and national security interests.
The proposed financing package includes a 15-year repayment period, providing Ivanhoe with favorable long-term capital to develop the project. Such extended terms are relatively rare in mining investment strategies but reflect EXIM Bank's mandate to support critical infrastructure developments with national significance.
Ivanhoe is currently evaluating this financing option alongside other alternatives, conducting due diligence on terms, conditions, and alignment with project development timelines. Industry analysts note that securing this level of government-backed financing could significantly de-risk the project for other potential investors.
Strategic Alignment with US Initiatives
The proposed EXIM Bank financing aligns perfectly with the bank's "Make More in America" initiative, which aims to support domestic manufacturing and reduce dependence on foreign supply chains for critical materials. As Robert Friedland, Executive Chairman of Ivanhoe Electric, emphasized: "The United States urgently needs domestically produced copper for its electric infrastructure, transportation, defense, and technologies of the future."
The Santa Cruz project qualifies under the China and Transformational Exports Programme, designed to counterbalance Chinese influence in critical mineral markets. This program specifically targets projects that can reduce U.S. dependence on Chinese-controlled supply chains for materials deemed essential to national security.
Moreover, the project is being considered for EXIM Bank's Supply Chain Resilience Initiative, which provides financial tools to strengthen domestic production capabilities. These initiatives reflect growing bipartisan recognition that domestic copper production represents a strategic necessity rather than merely an economic opportunity.
The project may also qualify for the Section 45X advanced manufacturing production tax credit, potentially worth $3 per kilogram for domestically produced copper cathode. This additional financial incentive further enhances project economics and reflects government commitment to onshoring critical mineral production.
Why is the Santa Cruz Project Strategically Important?
Critical Minerals Security and Supply Chain Resilience
The Santa Cruz Copper Project directly addresses a significant strategic vulnerability in U.S. copper production. Currently, the United States imports approximately 40% of its annual copper demand (about 3.5 million tonnes), creating economic and national security exposure to supply disruptions or price manipulation by foreign producers.
By developing a major domestic copper source, the project contributes to national resilience in a mineral classified as "critical" by multiple federal agencies. The U.S. Department of Energy has specifically identified copper as essential for grid expansion and electric vehicle adoption under the Bipartisan Infrastructure Law.
The project enhances U.S. competitiveness in critical mineral markets currently dominated by a small number of producing countries. Chile (28% of global output) and Peru (12%) currently control significant portions of global copper production, while China dominates processing capacity – creating a strategic vulnerability that Santa Cruz helps mitigate.
Perhaps most importantly, the project strengthens national supply chains for resources essential to both civilian infrastructure and defense applications. Few Americans realize that modern military equipment is extraordinarily copper-intensive – with a single F-35 fighter jet containing approximately 20 million pounds of copper across its components and systems.
Economic and Infrastructure Benefits
Beyond strategic considerations, the Santa Cruz Copper Project will support the massive expansion of U.S. electric transmission infrastructure required for renewable energy integration. The International Energy Agency estimates that clean energy technologies require up to four times more copper clean energy investments than conventional alternatives, creating unprecedented demand pressure.
The project will also contribute to transportation infrastructure development, particularly electric vehicle charging networks and mass transit systems. Every electric vehicle contains approximately 180 pounds of copper – nearly four times the amount in a conventional vehicle.
The project enhances national defense capabilities by ensuring domestic availability of materials critical to military communications, weapons systems, and logistics infrastructure. The National Defense Stockpile currently holds only about 12,000 tonnes of copper – representing just 0.3% of annual demand.
By developing Santa Cruz, the U.S. positions itself for greater self-reliance in critical metals production at a time when geopolitical competition for resources is intensifying globally.
What Makes This Project Significant for US Copper Production?
Domestic Production Advantages
The Santa Cruz project will produce pure copper cathode domestically, with projected purity levels exceeding 99.99% Cu through solvent extraction-electrowinning (SX-EW) technology. This high-purity output is suitable for advanced applications in electronics, renewable energy systems, and defense technologies.
Current U.S. copper production stands at approximately 1.2 million tonnes annually – down 15% since 2000 despite growing demand. Santa Cruz's potential output of 200,000 tonnes per year would represent a significant 17% increase to domestic production capacity.
The project addresses an urgent need for domestically produced copper at a time when global copper market outlook forecasts indicate intensifying competition for resources. As demand from renewable energy, electric vehicles, and grid modernization accelerates, projections suggest a potential global copper deficit of 4.7 million tonnes by 2030 without new project development.
Santa Cruz supports the U.S. strategic mission for critical metals self-reliance, reducing vulnerability to supply disruptions or economic coercion. Industry analysts estimate the project's production costs at $1.50-$1.80 per pound – competitive with the global average of $1.90 per pound, enhancing its long-term economic viability.
Technology and Future Applications
The copper produced at Santa Cruz will support numerous technologies of the future requiring substantial copper inputs. A single 3-megawatt wind turbine contains up to 4.7 tonnes of copper, while utility-scale solar installations require approximately 5.5 tonnes of copper per megawatt of capacity.
The project will contribute significantly to U.S. electric transportation infrastructure development. Beyond the vehicles themselves, charging infrastructure is highly copper-intensive, with each fast-charging station containing up to 25 kg of copper in cabling and components.
By developing Santa Cruz, the U.S. enhances national security through domestic resource development, reducing dependence on potentially unstable or adversarial source countries. This security dimension extends beyond physical supply to include protection against economic coercion through resource markets.
What Happens Next in the Financing Process?
Due Diligence and Approval Process
With the letter of interest in hand, Ivanhoe may now submit a formal application to EXIM Bank for the proposed financing. This application would include detailed project economics, development timelines, and risk management strategies.
Following application submission, EXIM Bank will conduct necessary due diligence, including technical feasibility assessment, environmental impact evaluation, and creditworthiness analysis. This process typically takes 6-9 months for projects of similar scale and complexity.
The final lending commitment remains contingent on due diligence results, which will evaluate the project against EXIM's established criteria for critical mineral developments. These criteria include alignment with National Defense Authorization Act priorities and demonstration of economic viability.
The decision timeline will follow formal application submission, with similar projects like the Thacker Pass Lithium Project having received EXIM approval after approximately 11 months of review (2023-2024). Industry experts anticipate potential approval by mid-2025 if Ivanhoe proceeds with the application process promptly.
Project Development Milestones
The completion of the preliminary feasibility study by June 2025 represents the next major technical milestone for the project. This comprehensive document will detail mining methods, processing technologies, and economic parameters – providing greater certainty for investors and lenders.
Construction is expected to begin in the first half of 2026, contingent upon financing arrangements, permitting approvals, and board authorization. Industry observers note that the project's location on private land significantly reduces permitting complexity compared to projects on federal lands.
Further government support program applications are likely as the project advances, potentially including Department of Energy loan guarantees or Defense Production Act Title III funding. These additional funding sources could complement EXIM financing and further enhance project economics.
FAQs About EXIM Bank Financing for Mining Projects
What is EXIM Bank's role in supporting US mining projects?
EXIM Bank provides financing for projects supporting domestic critical mineral production, addressing market gaps where private financing may be insufficient or unavailable on competitive terms. In 2024 alone, EXIM has committed approximately $4.2 billion toward critical mineral projects.
The bank implements initiatives like "Make More in America" to enhance U.S. competitiveness in strategic sectors, including mining and mineral processing. These programs directly counter similar initiatives by other countries, particularly China's Belt and Road Initiative financing for resource development.
EXIM offers financial tools to strengthen U.S. critical mineral supply chains, including loan guarantees, direct loans, and export credit insurance. These tools can be particularly valuable for capital-intensive mining feasibility studies with long development timelines and complex risk profiles.
How do mining projects qualify for EXIM Bank financing?
Mining projects must support domestic production of critical minerals as defined by the Department of the Interior's critical minerals list, which includes copper, lithium, rare earth elements, and numerous other metals essential to advanced technologies.
Projects should contribute to economic growth and national security by addressing supply vulnerabilities or technological leadership in strategic sectors. Quantifiable metrics like job creation, export potential, and supply chain impact factor into evaluation criteria.
Qualifying projects need to align with strategic initiatives like the China and Transformational Exports Programme, which explicitly aims to counter Chinese dominance in critical mineral supply chains. This alignment involves demonstrating how the project reduces U.S. dependence on foreign sources.
What other government support programs are available for critical mineral projects?
The Supply Chain Resilience Initiative offers financial tools specifically designed to strengthen domestic production capabilities for critical materials. These tools can include preferential financing terms, technical assistance, and market development support.
Section 45X advanced manufacturing production tax credit provides significant financial incentives for domestic production of critical minerals and components. For copper specifically, this can amount to $3 per kilogram for cathode production – potentially worth tens of millions annually for a project of Santa Cruz's scale.
Various additional initiatives supporting domestic critical mineral production exist across federal agencies, including the Department of Energy's Loan Programs Office, the Defense Production Act Title III program, and the U.S. International Development Finance Corporation's domestic financing authorities established in 2020. Understanding copper price dynamics remains crucial for investors evaluating the long-term viability of projects like Santa Cruz within this evolving policy landscape.
Want to Capitalize on the Next Major Copper Discovery?
Stay ahead of the market with instant alerts for significant ASX mineral discoveries through Discovery Alert's proprietary Discovery IQ model. Explore how historic discoveries have generated substantial returns by visiting our dedicated discoveries page and position yourself for investment success.
