Sumitomo Metal Mining (SMM) and Sumitomo Corporation (SC) have signed an investment agreement with Quadra FNX Mining for the development of the Sierra Gorda project in Chile.

Under the terms of agreement, SMM and SC will form a 70:30 joint venture in Chile subscribing to 45% of the shares of Quadra FNX’s subsidiary Minera Quadra Chile, which owns the project.

In return, Minera Quadra Chile will invest $724m in the development of the project.

The Sierra Gorda project has total mineable reserves of about 1.3 billion tons, 5Mt of which is copper.

The mine has a life span of 20 years with an average annual production of 730,000t of copper and 22,000t of molybdenum concentrate.

The project is scheduled to commence production in 2014.