By Ryan Dezember

Nearly 6,000 acres of old Arizona farmland once intended for a residential subdivision is on track to potentially become home to the first big new U.S. copper mine in more than a decade.

If all goes as planned, Ivanhoe Electric will begin construction of its Santa Cruz mine early next year and start selling copper cathodes to manufacturers before the end of 2028. That is a blink of an eye in mining, where the time between discoveries and production is often measured in decades.

The mine is on an unusually fast track as a result of being on private property along a booming industrial corridor between Phoenix and Tucson. The sooner it comes online, the better -- and not just for Ivanhoe Electric's investors.

U.S. copper prices surged to records last week ahead of the 50% tariff that President Trump has promised to impose on imports Aug. 1. Traders and analysts expect copper prices in the U.S. to remain aloft as long as the import taxes are in place, fetching a big premium to the global price set in London's trading pits.

Even without tariffs, copper prices are expected to climb because of booming demand to build data centers, renewable-energy installations and electric cars.

More expensive copper will boost the cost of making everything from automobiles to electronics as well as building houses. There are hundreds of pounds of copper in the typical American home between electrical wiring, plumbing and appliances. The average car contains nearly a mile of copper wiring alone.

In a social-media post Wednesday night, Trump cited copper's use in semiconductors, aircraft, ships, ammunition, radar systems and other military assets as reason for the tariff.

"Copper is the second most used material by the Department of Defense!" the president wrote. "America will, once again, build a DOMINANT Copper Industry."

The copper tariff echoes the strategy behind the 25% steel tariff that Trump implemented in the name of national security during his first term.

The Biden administration maintained that levy, and Trump recently raised it to 50%. U.S. prices rose, which encouraged investment in electric arc furnaces and raised domestic steelmaking capacity, said Chris LaFemina, head of metals and mining research at Jefferies.

As with steel, the U.S. has lost copper market share, notably to China, which has built up its smelting and refining capacity. An analysis last year by S&P Global concluded that the U.S. has enough copper in the ground to meet domestic demand, but mine and processing capacity are insufficient.

There are only two operating smelters in the U.S. Last year, about 29% of domestic copper-mine output was sent abroad for processing, according to the U.S. Geological Survey. Imports of refined copper made up about 45% of U.S. supply.

Meanwhile, mine output has declined. A mine that produces nickel and copper opened in 2014 in Michigan's Upper Peninsula, but the last big copper mine to open was in 2007 when Freeport-McMoRan, the country's largest producer, started its Safford open-pit mine east of Phoenix.

Proposed mines in Arizona, Michigan, Montana and Minnesota have been mired in legal challenges, permitting delays or other obstacles.

"The purpose of these tariffs is to incentivize investment in downstream smelting and refining and effectively taking market share away from China," LaFemina said. "The second step is building mine capacity, which takes much longer."

Ivanhoe Electric's Santa Cruz mine won't need to send its output to a smelter. The copper oxide ore beneath its property can be separated from the rest of the rock in a process called heap leaching to produce pure copper cathodes ready to sell to manufacturers at the mine gate.

The underground mine will be equipped with a small rail system to bring 20,000 tons of earth to the surface daily for processing.

U.S. mining sites tend to be on or near public land, which can make for complicated and contentious approvals. Ivanhoe Electric's property sits among cropland, factories and desert at a junction of highways, rail, power lines and natural-gas pipelines.

"It's a ready-made site for an advanced copper project," Chief Executive Taylor Melvin said.

Miners studied the site in the late 1980s but abandoned the project. In recent years, billionaire mining financier Robert Friedland launched Ivanhoe Electric to mine the property, which it bought from home builder D.R. Horton.

Ivanhoe Electric filed a 272-page preliminary feasibility study with regulators late last month, starting the race to production. The document was the culmination of more than $100 million of study, engineering and drilling. It determined a mine life of 23 years, with an average estimated annual copper production during the first 15 years of 72,000 tons. That would make it one of the country's most prolific mines.

The expected average cost of production is $1.32 a pound, compared with recent market prices greater than $5.50.

The Arizona company is using the study to solicit additional equity investors, negotiate with lenders and get permits from state, county and city officials in nearby Casa Grande, said Melvin, a former JPMorgan investment banker and Freeport-McMoRan executive.

"That's a much more straightforward permitting process," he said. "To avoid the federal permitting process is a huge advantage."

Write to Ryan Dezember at ryan.dezember@wsj.com

(END) Dow Jones Newswires

July 14, 2025 07:00 ET (11:00 GMT)

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