<strong>A Mile Underground, America’s Largest Untapped Copper Mine Inches Toward Reality</strong>

Resolution Copper, a $10 billion project owned by Rio Tinto Group and BHP Group in Arizona, represents America's largest untapped copper deposit, capable of supplying a quarter of US demand. Despite over two decades and $2 billion invested in development, the mine remains unoperational due to persistent permitting hurdles and significant tribal and environmental opposition, underscoring the complex challenges in bringing critical resource projects online in the US.

Analysis

The Resolution Copper project in Arizona, a joint venture between Rio Tinto (RIO) and BHP Group (BHP), represents a significant but heavily encumbered asset. Despite an investment exceeding $2 billion over two decades and the potential to supply a quarter of US copper demand, the project remains non-operational. The negative per-ticker sentiment of -0.3 for both RIO and BHP underscores investor concern regarding the substantial sunk costs and persistent uncertainty. While significant engineering milestones have been achieved, including the construction of one of the deepest shafts in the US, the project is fundamentally stalled by non-technical factors. The primary impediments are significant permitting hurdles, along with strong opposition from tribal and environmental groups, highlighting a critical intersection of commodities, regulation, and ESG themes. The mention of a potential political boost suggests the project's timeline is highly sensitive to US domestic politics, but this does not resolve the underlying legal and social challenges, justifying the market's cautious tone.

Key Decisions for Investors

• Investors in Rio Tinto and BHP should treat the $10 billion Resolution Copper project as a long-dated, high-risk option on future copper supply, as its value is contingent on overcoming significant regulatory and social opposition.
• Monitor US political developments and federal permitting decisions closely, as these are the primary catalysts that could either de-risk the project or prolong its dormant state.
• Given the two decades and over $2 billion invested without generating revenue, the project should not be factored into near-term cash flow forecasts for either company, but represents potential long-term strategic value if copper demand and domestic sourcing priorities intensify.