Advanced discussions are underway between Ivanhoe Electric and would-be purchasers of copper from its Arizona development, Bloomberg reported Monday, citing chief executive Taylor Melvin in a Thursday interview. Both conventional metals merchants and prospective strategic allies hunting domestic supply for American industry have expressed interest in Santa Cruz's future output, Melvin said, without identifying the parties. The common thread is power demand: mushrooming data centers and grid buildout are feeding the metal's bid. The news landed with three-month copper on the London Metal Exchange at $14,452.50 a metric ton, up 0.31% in early Monday trading, according to Reuters — roughly $6.56 a pound.
There is a catch in the timing worth keeping in mind. First copper from Santa Cruz is not expected until 2029 under the updated preliminary feasibility study released September 23. That makes these forward offtake-style discussions rather than spot sales — buyers are locking in future domestic supply, not buying metal that exists yet.
Why it matters
Santa Cruz is one of the most advanced new copper projects on American soil, and the September study explains why buyers are circling years before first production. It carries an after-tax NPV of $1.5 billion at a $4.75-a-pound base-case price, with $1.43 billion of initial capital and average output of about 75,000 tonnes of cathode a year over its first 15 years. Mine life is 24 years, C1 cash costs $1.47 a pound, all-in sustaining $2.28 — first-quartile Americas costs, per Deterra Royalties. The design makes 99.99%-pure cathode on site via heap leaching, no smelter needed, which fits Washington's push to rebuild domestic critical-mineral supply. The financing reflects it: the US Export-Import Bank's August preliminary letter covers up to $1.1 billion in potential debt, up from $825 million in April 2025. Saudi miner Ma'aden closed a 9.9% stake purchase for $126.50 million on October 12, and Deterra paid $74.15 million in late September for a royalty, underwritten at $5-a-pound copper. Today's physical market is tight too: Reuters reported Monday that copper edged higher on severe concentrate shortages, with treatment fees deeper in negative territory, while the end of a strike at a major Chilean mine eased some immediate supply concern. See the wider supply picture in our Escondida copper strike coverage and the commodities hub.
| Santa Cruz key figures | Detail |
|---|---|
| After-tax NPV (8%) | $1.5B at $4.75/lb base-case copper |
| Initial capital | $1.43B (up from $1.24B in 2025 PFS) |
| Output, first 15 years | ~75,000 tonnes cathode/year |
| Mine life | 24 years |
| C1 cash costs | $1.47/lb; AISC $2.28/lb |
| First production | 2029 (pushed from 2028) |
| EXIM support | Up to $1.1B potential debt financing |
| Deterra royalty | $74.15M paid; 1.68% NSR, then 1.57% |
What to watch
- Whether Ivanhoe names a buyer or offtake partner in the coming weeks — a signed agreement would validate the forward-pricing level.
- The US Export-Import Bank's final board consideration, expected in spring 2027, on the $1.1 billion facility.
- Box-cut development at Santa Cruz, scheduled to begin this month, and tunnel-boring-machine decline work targeted for summer 2027.
- LME copper's reaction near the record zone — a failed breakout or a push to new highs will set the tone for offtake pricing.
MarketRadar take
The math behind the buyers' interest is simple. At 75,000 tonnes a year — about 165.3 million pounds — and today's LME price near $6.56 a pound, Santa Cruz could generate roughly $1.08 billion in annual revenue at full production against C1 costs of $1.47 a pound, implying an operating margin near $840 million a year before royalties. That cushion is what makes forward talks at record prices rational: buyers lock in domestic cathode ahead of a deepening concentrate squeeze, while Ivanhoe lines up demand that underpins its financing. Watch for a named offtake announcement — pricing tied to current LME levels rather than the study's $4.75 base case would mark a step-change. Bullish for copper's demand narrative.
