Rio Tinto (ASX:RIO) has signed a deal with Sumitomo Metal Mining (TYO:5713) to establish a joint venture to develop the Winu Copper-Gold Project in Western Australia.
Under the term sheet, which includes obligations to work towards a definitive agreement, Rio Tinto will develop and operate Winu as managing partner.
Meanwhile, Sumitomo will pay Rio Tinto $399 million for a 30% stake in the project. This payment includes $195 million upfront and $204 million in deferred considerations contingent on milestones and adjustments to be agreed.
Both companies are working to finalise definitive agreements for the JV in the first half of next year, alongside formalising the broader strategic partnership.
A Prefeasibility Study for Winu is also expected to be completed next year, outlining an initial processing capacity of up to 10 million tonnes per year.
Rio Tinto Copper CEO Katie Jackson says the company shares a long history with Sumitomo Metal as partners.
“This is a unique opportunity to de-risk our investment, as we work with an experienced partner,” Jackson says.
“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 Nyangumarta Traditional Owners and the Karlkayn airstrip with the Martu Traditional Owners, in a way that benefits all parties.”
Both companies have also inked a letter of intent to develop a broader strategic partnership to work together to explore opportunities for commercial, technical, and strategic collaboration across copper, base metals, and lithium.
Discovered in 2017, the Winu Project is located in proximity to Rio Tinto’s iron ore assets in the Pilbara region.
Sumitomo Metal Mining is a battery manufacturing company that engages in mining, smelting, and refining non-ferrous metal in Japan and internationally.
Write to Aaliyah Rogan at Mining.com.au
Images: Sumitomo
