Hudbay Minerals Inc. is Canada’s second largest copper producer, with operations and development projects across Canada, Peru and the United States. While the company is primarily focused on copper production, it also produces gold, silver and zinc, and is positioning itself around long-life assets and the growing demand for critical minerals linked to the energy transition.
The mining conversation has shifted dramatically in recent years. What feels fundamentally different about this moment for the industry?
Self-sufficiency is now top of mind. Countries do not want to be beholden to access critical minerals from elsewhere, and we are seeing that clearly in the United States and Canada. There is recognition that Canada not only has the potential, but already has the ingredients needed to contribute to self-sufficiency. Canada’s advantage will be defined not just by what it has in the ground, but by how effectively industry transforms that into responsible long-term production of critical minerals, like copper, while developing and deploying attractive processing technologies. This will ensure that Canada expands production of critical minerals that are ready for both export and domestic downstream use in manufacturing. Hudbay is at the forefront of this effort as we look to deploy processing technology at our assets in both Canada and the United States.
Three years ago, the conversation was much more about Environmental, Sustainability and Governance (ESG) frameworks and decarbonization. Mining was often viewed less favourably because this framing focused on the disruptive nature of the industry, rather than viewing mining as producing the critical minerals required for the energy transition. Today, mining is increasingly seen as essential to decarbonization and national security. Governments also have a better understanding around how companies must operate responsibly and efficiently both for compliance reasons and, more importantly, to gain a social license to operate.
Demand for copper has become self-evident. How serious could the copper supply challenge become?
Your question is on point. At Hudbay, we see copper availability being increasingly driven by supply than by demand. We simply do not think enough new supply is coming online to meet future demand.
There are almost no permitted projects ready to go. Last year alone, roughly one million tonnes of anticipated copper production was removed from supply. Looking forward, Hudbay’s Copper World project in Arizona is one of the very few fully permitted copper mines in North America. When it begins operating in 2029, it will produce about 100,000 tonnes per annum. While the new mine will offset only about 10% of that reduced supply, it will position Hudbay into becoming one of the largest copper producers in the United States.
We anticipate closing the acquisition of Arizona Sonoran’s Cactus project in Arizona during the second quarter, which together with Copper World would create the third largest copper district in North America once in production. We also have the Mason copper project in Nevada, and we plan to take a staggered approach in developing these three projects to continue growing our copper production and our presence in the United States. The combination of these strategic developments combined will make Hudbay one of the largest copper producers in North America. However, this takes many years of prudent planning, designing, permitting and developing to bring these projects into production.
The key question is whether enough new supply can be developed responsibly and on time to keep pace with growing demand from electrification, data centers and AI infrastructure.
One of the biggest barriers to bringing new copper online has historically been permitting, although we are now seeing some movement there, including in Canada. There has been some progress in streamlining permitting processes, and governments have been signaling positive intentions towards simplifying these processes. The Canadian government has also signalled its intent to invest in infrastructure, which could unlock new areas for exploration and development.
Governments are talking more openly about accelerating critical mineral development. Where are you seeing real progress, and where do projects still get stuck?
Copper projects tend to be large and long life, so it is natural that multiple stakeholders have important roles to play. Hudbay has been operating for nearly a century and has demonstrated a proven track record of responsibly exploring, developing, operating, and reclaiming many sites over its history.
We recently saw real progress in British Columbia where we secured permits for the New Ingerbelle expansion project at our Copper Mountain mine. This extends the mine life to beyond 2040 and secures more than 800 jobs. Governments understand the economic significance of projects like this, and provincial and federal governments have become more energized about moving things forward faster while ensuring community, safety and environmental concerns continue to be addressed.
Similarly, in the United States, we have seen movement to help advance mining projects, including proposed bipartisan bills to clarify the regulatory process for permitting a mine on federal lands.
The challenge is aligning the many stakeholders involved in these projects. Working with multiple regulators, local communities, Indigenous groups and other stakeholders is critical to ensuring meaningful relationship building throughout the entire process. These engagement and transparency efforts create clarity and confidence around a given project, which allows companies like Hudbay to commit capital investments and engage with local communities to gain the social license to operate.
In Hudbay’s case, the people in the local communities that benefit from our presence know that we leave the community better off following mining activities compared to before we arrive, and this is something that is critically important to us.
These communities also understand that mining creates opportunities to foster skills in local communities. When we first started operating in Peru, there were no miners in the local community. Today, more than 98% of the people who work at the mine come from Peru and the local community itself. In addition, we have invested in training for women from local communities to operate heavy mining equipment and shovels, giving them useful transferrable skills. In Canada, 13-17% of our workforce identifies as Indigenous and we continue to invest in programs like Mining Fundamentals to help train and upskill indigenous community members for long-term careers in mining.
Hudbay is making major investments in Manitoba. What are you most focused on there?
We are undertaking the single largest exploration effort in the company’s history. This year alone, we are spending $50 million in exploration in Manitoba. Part of that is focused on extending the life of existing assets like the Lalor mine in Snow Lake, while also conducting geophysical exploration around it to identify the next potential anchor asset.
Over the last 100 years, we have discovered three anchor assets that supported the other mines we built, specifically the Lalor, 777, and Flin Flon deposits. In total we have operated 29 different mines in northern Manitoba, and we believe our expanded exploration efforts will yield us our next anchor asset.
Five years ago, we took the steps to refurbish the New Britannia processing facility and invested over $150M to enhance our gold processing capacity and deliver 90% gold recoveries from our ore instead of the 50–60% we historically saw at the existing Stall base metals processing facility. This has transformed our Snow Lake operations into a gold mine, and it is now one of the lowest-cost gold mines in Canada. The ongoing strong cash flow generation from our gold operations will continue to support future investments across our portfolio and deliver attractive growth for our stakeholders.
Hudbay is now the second-largest copper producer in Canada. What will it take to become number one?
Our aim is to be the highest quality diversified copper company focused on expanding margins, strong cashflow generation, and prudent allocation of capital to drive value for all of our stakeholders.
To grow our business in Canada, first, we need the ore bodies. Exploration is critical, and we have highly prospective ground around both our Manitoba and British Columbia operations that we are investigating.
Second, we will continue our approach to operational excellence and long-term value creation by investing in existing assets to extend mine life and optimize performance. A great example of this approach is the investments we have made at Copper Mountain to turn around this operation since acquiring it in 2023. We are investing in accelerated mine stripping activities to unlock higher grades and optimize mine sequencing, while also investing in mill enhancements to increase mill availability, throughput and operating efficiencies.
Third, we can continue to evaluate strategic partnerships where they make sense because they can help accelerate the development of new projects through attractive funding and leveraging our collective technical expertise. We have done this in the United States with our Copper World project where we welcome Mitsubishi Corporation as a 30% joint venture partner as a key catalyst for de-risking the development of the project. In Canada, we have expanded exploration collaboration with international partners such as JOGMEC and Marubeni in the Flin Flon region for the same reasons.
We are also trialing technologies in Manitoba to reprocess tailings that have been sitting there for nearly 100 years. Those tailings still contain copper, zinc, gold and silver that older technologies could not recover efficiently. Reprocessing them could effectively create another mine while also reducing long-term water treatment requirements.
By executing on these initiatives, I have no doubt that through prudent growth we’ll be positioned as the premier copper company in Canada.
How do you see artificial intelligence and automation shaping mining operations?
We have to embrace artificial intelligence. AI, machine learning, and emerging technologies will be particularly important in enhancing our processing and technical capabilities. In Manitoba, for example, we already use remote-controlled ore evacuation underground. A lot of that work is now handled autonomously or from the surface, which removes people from higher-risk environments underground while still maintaining jobs and requiring human intervention. We would follow a similar, measured approach in AI adoption.
What separates jurisdictions that are genuinely mining-friendly from those that simply claim to be?
In many cases, it comes down to establishing reasonable timelines for issuing permits to discover, develop, operate and close a mine. In addition, having a strong respect for the rule of law and a stable fiscal regime is critical for attracting foreign mining investments.
This is why Hudbay operates in jurisdictions that support responsible mining, which we consider tier-one jurisdictions: Canada, the United States and Peru. All three countries are investment grade countries in the Americas, with strong rule of law and respect for human rights consistent with the Hudbay’s long-standing focus on environmental, social and governance principles.
