TOKYO (Reuters) – Japan’s Sumitomo Metal Mining (SMM) said on Monday it has agreed to buy a 30% stake in the Winu copper-gold project in Western Australia from Rio Tinto.
The move comes as part of the Japanese miner’s efforts to expand its copper and gold assets, and follows the two miners’ agreement last December to form a joint venture to develop and operate the project.
Under the deal, as consideration for the acquired interest, SMM will make an upfront cash payment of $195 million to Rio Tinto in 2025 when the transaction is expected to close.
Additionally, SMM will pay deferred consideration of up to $235.4 million, contingent upon the achievement of milestones based on potential future expansion of the project’s mill throughput.
The Winu project, located in the Great Sandy Desert region of Western Australia, is a copper-gold mineralized zone discovered by Rio Tinto in 2017.
As of the end of 2024, the project’s estimated indicated and inferred resources total 741 million metric tons, containing about 3 million tons of copper and 250 tons of gold, SMM said in a statement.
Rio Tinto is currently conducting a pre-feasibility study for building a mill with an annual throughput capacity of 10 million tons and has initiated the relevant environmental permitting processes.
A spokesperson for SMM said it remains unclear when production is likely to begin and what the total development cost will be.
SMM, which produced 230,000 tons of copper through equity holdings in the fiscal year ended March 31, aims to boost its copper output to 300,000 tons over the long term.
(Reporting by Yuka Obayashi; editing by David Evans)
