Sumitomo Metal Mining (SMM) has signed definitive agreements with Rio Tinto to acquire a 30% interest in the latter’s Winu copper-gold project in Western Australia’s Great Sandy Desert.
Under the agreements, SMM will invest up to $430.4m (Y63.65bn) for its share, including $195m upfront and up to $235.4m in deferred considerations based on future milestones.
Post-transaction, Rio Tinto will retain a 70% share and operate the project.
The agreement follows a term sheet signed in December 2024 and builds on the companies’ previous collaboration at the Northparkes mine in New South Wales.
The strategic partnership will extend beyond the Winu project, as both parties aim to explore commercial, technical and strategic collaboration opportunities across copper, other base metals and lithium.
The transaction’s closure is anticipated in 2025, pending regulatory approvals and customary conditions.
Rio Tinto Copper chief executive Katie Jackson said: “Our relationship with SMM began in 2000 with our partnership at the Northparkes mine in New South Wales and we look forward to bringing our combined experience and expertise to deliver the Winu project.
“This partnership is an excellent fit for Rio Tinto and will strengthen the project, as we continue to prioritise the strong and enduring partnerships built to date with the land’s Traditional Owners, the Nyangumarta and the Martu.”
The Winu project, discovered in 2017, has estimated indicated and inferred resources of 741 million tonnes (mt), with a copper grade of 0.40% and gold at 0.33 grams per tonne, containing approximately 3mt of copper and 250 tonnes (t) of gold.
The project is expected to be a low-risk, long-life deposit with significant expansion potential.
SMM, aiming to produce 300,000t of copper annually, holds interests in several global copper mines. It views the Winu project as a significant addition to its copper portfolio.
Rio Tinto is conducting a prefeasibility study for a 10mt annual mill throughput, which is expected to be completed in 2025. It has also initiated environmental permitting processes, alongside the submission of an environmental review document, anticipated this year.
The company is also engaging with the Nyangumarta and Martu Traditional Owners to progress project agreement negotiations.
RBC Capital Markets and Herbert Smith Freehills are advising SMM financially and legally, respectively.
