Barrick Gold has entered into an agreement to form a joint venture with Saudi Arabian Mining (Ma'aden) to operate the Jabal Sayid copper mine near Medina, Saudi Arabia.
Ma'aden will buy a 50% stake for $210m while the remaining ownership will continue to be with Barrick.
Canada-based Barrick Gold acquired Jabal Sayid mine as part of its $6.7bn purchase of copper mining company Equinox Minerals in 2011.
Though the project's construction work was completed in 2012, the production was delayed due to regulatory issues.
Barrick Gold president and CEO Jamie Sokalsky said: "This joint venture will enable the Jabal Sayid project to move forward with the benefit of Ma'aden's extensive experience in the Saudi Arabian mining sector, combined with Barrick's technical and operating expertise."
The mine has 1.4 billion pounds of copper reserves as at the end of 2013 and is estimated to produce for 15 years.
Plans are underway to start commercial production in late 2015 and mine around 100 to 130 million pounds of copper a year during the first five years of operations.
Sokalsky said: "Once in production, Jabal Sayid will be a high-quality, low-cost underground copper mine capable of generating substantial free cashflow, while providing benefits for local communities through training, employment and economic development."
The two companies plan to continue exploration works at the site to extend the mine's life.
Barrick is divesting in the mine in order to repay the debt incurred during the purchase of Equinox. Ma'aden is investing in copper assets to diversify its mining portfolio, which currently includes phosphate, aluminium, gold and industrial minerals.
Ma'aden is also expecting the collaboration with Barrick to help it gain specialised copper know-how and technology which can be used in other mines.
Image: Officials of Saudi Arabian Mining and Barrick Gold signing the Jabal Sayid copper project deal. Photo: courtesy of Maaden - Saudi Arabian Mining Company.