Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) has signed a term sheet with Sumitomo Metal Mining (TSE:5713) for a joint venture to advance the Winu copper-gold project in Western Australia.
The partnership, announced on Wednesday (December 4), seeks to develop both companies’ exploration initiatives.
Sumitomo will acquire a 30 percent equity stake in the Winu project for US$399 million, including an initial payment of US$195 million and US$204 million in deferred considerations tied to project milestones and other conditions.
Rio Tinto will retain a 70 percent interest and will remain the project’s managing partner.
The companies believe that Winu, which was discovered by Rio Tinto in 2017 near its Pilbara iron ore assets, has the potential for long-term growth and resource expansion. A prefeasibility study is scheduled for completion in 2025, and will look at an initial processing capacity of up to 10 million metric tons per year.
The partnership leaves room for further collaboration between Rio Tinto and Sumitomo through a letter of intent. Future opportunities to explore for copper, other base metals and lithium are a strong point of shared interest.
In its announcement, Rio Tinto also emphasizes its ongoing engagement with the Nyangumarta Traditional Owners, with negotiations for project agreements continuing as a priority. The company is also in ongoing collaboration with the Martu Traditional Owners on the Karlkayn airstrip, a related infrastructure project.
Also next year, an environmental review document is slated for submission under the Environmental Protection Authority’s environmental impact assessment process.
Rio Tinto and Sumitomo anticipate that definitive agreements for the Winu joint venture will be finalized in the first half of 2025, subject to regulatory approvals and customary conditions.
The companies are positioning themselves to address increasing demand for copper and gold.
The Winu plans also continue Rio Tinto’s approach of achieving a favorable position in the ongoing energy transition — the company recently announced plans to acquire Arcadium Lithium (NYSE:ALTM,ASX:LTM).
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.