Diversified mining company Rio Tinto announced on Wednesday that it would sell a 30% stake in its Winu copper/gold project to Japan’s Sumitomo Metal Mining (SMM) for $399-million.
Under the terms of the deal, SMM would pay $195-million upfront and $204-million in deferred consideration. The deferred payment was contingent on meeting certain milestones and adjustments that would be agreed upon by both parties.
“This is a unique opportunity to derisk our investment, as we work with an experienced partner,” said Rio Tinto copper CEO Katie Jackson.
Located in the Great Sandy Desert region of Western Australia, the Winu deposit was discovered by Rio Tinto in 2017. The project has been recognised for its long-life potential, positioning it as a key asset in the company’s copper portfolio.
As part of the agreement, Rio Tinto and SMM will work to finalise the definitive joint venture agreements for Winu in the first half of 2025. Further, they will formalise a broader strategic partnership.
Rio Tinto has emphasised its continued commitment to working with the Nyangumarta Traditional Owners of the region, progressing project agreement negotiations in partnership with the local Indigenous community.
A prefeasibility study for the Winu project is expected to be completed by 2025. The study will include an initial development plan for processing capacity of up to 10-million tonnes a year, as well as the submission of an environmental review document under the Western Australia Environmental Protection Authority’s impact assessment process.
Rio Tinto’s focus on copper is consistent with the broader industry trend, as the company seeks to expand its exposure to the metal, a key component of the global transition to cleaner energy. Rio operates the Escondida mine in Chile, the world’s largest copper mine by production.