BHP Group Limited ( BHP )‘s subsidiary inked a definitive Exploration Alliance Agreement with Ivanhoe Electric Inc. ( IE ) .

As per the terms, BHP and Ivanhoe Electric ( IE ) plan to explore mutually agreed “Areas of Interest” or AOIs in the U.S. to identify projects within those AOIs that may become 50/50 owned joint ventures. 

The companies have identified six initial AOIs in Arizona, New Mexico, and Utah, which cover an area of approximately 3,655 km.

BHP (through a wholly owned subsidiary) expects to provide $15 million to fund the Alliance for its initial three-year term, which may be extendable by mutual agreement. Any funding of BHP beyond the initial $15 million would be on a 50/50 basis.

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On the other hand, Ivanhoe Electric ( IE ) will operate the Alliance during the Project Generation Phase, but operatorship of any project will be mutually agreed upon in the future.

Ivanhoe Executive Chairman Robert Friedland said, “Today we announce an important Alliance with BHP, one of the world’s leading mining companies, to explore the untapped mineral wealth of the United States using our Typhoon™ and CGI technologies. BHP and Ivanhoe Electric ( IE ) have a common goal to find new sources of the critical minerals necessary to meet growing demand associated with the energy transition and the electrification revolution. We are excited to work together.”

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Sonia Scarselli, BHP’s Vice President Exploration, said, “BHP’s exploration alliance with Ivanhoe Electric ( IE ) supports our strategy to pursue growth in future-facing commodities such as copper. Technology is set to play an increasingly important role in discovering the resources the world will need in the decades to come. This alliance offers a great opportunity to work with Ivanhoe Electric ( IE ) and the innovative technologies they have built.”

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Investors can gain exposure to the stock via Exchange Traded Concepts Trust Optica Rare Earths & Critical Materials ETF and Amplify Lithium & Battery Technology ETF ( BATT ) .

Price Action: BHP shares are down 1.57% at $56.56 at the last check Wednesday.