Rio Tinto has agreed to sell a 30% stake in its Winu copper-gold project in Western Australia to Sumitomo Metal Mining (SMM) for $399m as part of a joint venture (JV) agreement.
The deal includes an upfront payment of $195m and $204m in deferred consideration tied to project milestones and agreed adjustments.
In line with this, both companies have also signed a letter of intent to collaborate to explore opportunities for commercial, technical and strategic collaboration across copper, other base metals and lithium.
According to the terms of the deal, Rio Tinto will retain a 70% stake in the project and continue as its operator.
Sumitomo Metal Mining mineral resources division general manager Hideyuki Okamoto said: “We look forward to renewing our long-standing relationship with Rio Tinto by partnering on the highly attractive Winu Project.
“We are also excited to explore further opportunities for collaboration given the strong alignment between our companies.”
Discovered by Rio Tinto in 2017, the Winu project is a significant copper-gold deposit located in the Great Sandy Desert region. It is positioned near Rio Tinto’s Pilbara iron ore assets and is considered highly prospective for future expansion.
To date, $438m has been invested in exploration and development at the Winu copper-gold project, said Rio Tinto.
Rio Tinto plans to complete a pre-feasibility study for Winu in 2025, targeting an initial processing capacity of up to 10 million tonnes per annum (mtpa).
An environmental review document will also be submitted under the Environmental Protection Authority’s assessment process. Rio Tinto is also working with the Nyangumarta Traditional Owners on the project agreements.
Rio Tinto copper chief executive Katie Jackson said: “Progress in 2024 including the attractive partnership proposal from Sumitomo Metal Mining has cemented the path forward for Winu to deliver profitable growth.
“We will continue to advance the Winu project in close partnership with the Nyangumarta Traditional Owners and the Karlkayn airstrip with the Martu Traditional Owners, in a way that benefits all parties.”
The parties will work towards finalising definitive agreements for the JV and closing the transaction by mid-2025. This will be subject to regulatory approvals and other customary conditions.
