Copper-hungry US buyers circle Ivanhoe Electric mine

Ivanhoe Electric (NYSE-A, TSX: IE) is in advanced negotiations to sell copper from its $1.4-billion Santa Cruz project in Arizona as surging demand from artificial intelligence infrastructure and power grids intensifies competition for United States supplies.

The company has attracted interest from traditional commodity traders and strategic partners seeking domestic copper supplies, CEO Taylor Melvin told Bloomberg News. He declined to identify the prospective buyers but said offtake agreements could include financing to help develop the mine.

“We need a lot more than Santa Cruz to fill that gap,” Melvin told the newswire, referring to the widening divide between U.S. copper demand and domestic production.

The negotiations come as copper prices hover near record highs and major technology companies seek to secure supplies for data centres and electricity networks. Global demand growth is expected to outpace production, increasing pressure on the U.S. to develop new mines and reduce its reliance on imported metal.

Financing talks

U.S. President Donald Trump publicly backed financing for Santa Cruz during an Aug. 7 mining roundtable at the State Department, highlighting the project’s importance to efforts to expand domestic mineral production.

That same month, Ivanhoe Electric received a Preliminary Project Letter (PPL) from the Export-Import Bank of the United States (EXIM Bank) outlining up to $1.1 billion in potential debt financing. The letter represents a preliminary step rather than a final loan commitment.

The company is also discussing project financing with about a dozen commercial banks, Melvin said.

Santa Cruz could become one of the first major new U.S. copper mines in nearly two decades. A preliminary feasibility study released last year estimated initial development costs at $1.24 billion, while the more recent figure for the project’s first phase stands at $1.4 billion. First production is targeted for 2029.

Melvin said the project, combined with nearby resources, could eventually establish one of the country’s leading copper-producing regions.

The financing discussions highlight the capital requirements facing U.S. copper developers as they seek to bring new production online. Potential supply agreements could provide an additional source of funding, although Ivanhoe has yet to announce binding deals.

Technology advantage

Santa Cruz plans to use an on-site processing method that produces copper cathode, a refined form of the metal that can be manufactured into wire, cable and foil. Ivanhoe has promoted the approach as part of its strategy to develop a lower-emissions operation.

The technology could appeal to buyers seeking more direct access to finished copper products while reducing the need for conventional processing facilities.

Major technology companies are already exploring alternative production methods to secure future supplies. Earlier this year, Amazon agreed to purchase copper from Gunnison Copper‘s (TSX: GCU; US-OTC: GCUMF) Arizona mine using proprietary leaching technology developed by Rio Tinto (ASX, LSE: RIO).

The process avoids conventional smelting and refining, with the resulting copper destined for Amazon’s data centres.

For Ivanhoe, securing customers and financing will be crucial to advancing Santa Cruz toward its planned 2029 start-up. The project’s development timeline also underscores the challenge facing the global copper industry: demand is accelerating faster than new domestic mines can be brought into production.