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Ivanhoe Electric (TSX:IE,NYSEAMERICAN:IE) is reportedly in advanced talks to sell copper from its Santa Cruz project in Arizona, and those deals could help fund construction of the mine.
President and CEO Taylor Melvin said in an interview last week that offtake agreements with prospective buyers could include financing for the project. He did not name the parties involved, Bloomberg reported.
The company is also in project financing talks with about a dozen commercial banks, according to Melvin.
The race to build artificial intelligence infrastructure has tightened global copper supply and kept prices near record highs. Melvin said that with global demand outpacing supply, the US urgently needs new domestic production.
“We need a lot more than Santa Cruz to fill that gap,” he emphasized.
Another Arizona copper operation has already secured a data center buyer. In January, Amazon Web Services, a subsidiary of Amazon (NASDAQ:AMZN), agreed to become the first customer for Rio Tinto's (ASX:RIO,NYSE:RIO,LSE:RIO)’Nuton bioleaching technology.
Under a two-year agreement, it will use copper produced at Gunnison Copper’s Johnson Camp mine in its US data centers. Rio Tinto says the process removes the need for traditional concentrators, smelters and refineries.
At Santa Cruz, Ivanhoe plans to mine ore underground, heap leach it and produce copper cathode on site using solvent extraction and electrowinning. Cathode is the feedstock for products such as wire, cable and foil.
The company’s September 2026 pre-feasibility study puts initial capital at US$1.43 billion, with first cathode targeted for 2029. The previous study, released in June 2025, estimated US$1.24 billion and targeted first production in 2028.
The offtake talks follow federal financing progress for the project. On August 24, Ivanhoe said it had received a Preliminary Project Letter from the Export-Import Bank of the United States (EXIM) for US$1.1 billion in potential debt financing under EXIM’s Make More in America Initiative.
The amount is US$275 million more than the US$825 million EXIM indicated in an April 2025 letter of interest. Ivanhoe expects EXIM’s board to consider final approval in spring 2027.
The letter also came 17 days after President Donald Trump told a mining roundtable in Washington on August 7 that EXIM was working to provide more than US$1 billion to finance the project.
Santa Cruz sits on nearly 6,000 acres of private land, including surface, mineral and associated water rights, which the company says allows for streamlined permitting. However, the company said the project still needs city, county and state permits, plus one federal permit.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.