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The new company, known as NewRange Copper Nickel LLC, will share costs to develop the two proposed mines, which aim to produce metals used to make electric vehicles and other green technologies.
Shares of St. Paul, Minnesota-based PolyMet jumped 6.8% on Wednesday morning after the news, while shares of Vancouver, British Columbia-based Teck fell 1.9%.
PolyMet’s $1 billion NorthMet project is by far the most advanced of the two, as it has received most of its permits. It does face some regulatory and legal opposition. Teck’s Mesabi project has yet to be fully studied and does not yet have permits.
Both projects are located in Minnesota’s Iron Range region, which has a long history of mining taconite ore for steel production. The area is about 200 miles (322 km) north of Minneapolis.
Both companies have agreed to fund the JV with an initial budget of $170 million for permitting and engineering work.
As part of the deal, PolyMet will remain an independent company and Glencore (OTC:GLNCY) Plc will remain its largest shareholder. Glencore has committed to funding up to $105 million of PolyMet’s share of the JV’s costs.
Glencore controls about 71% of PolyMet’s shares. As part of the JV announcement on Wednesday, PolyMet said that Glencore may eventually exercise its options to convert debt into equity, steps that would boost its stake to 78%.
