Japanese mining giant Sumitomo Metal Mining, which is listed on the Tokyo Stock Exchange, has paid A$615 million to join Rio Tinto (ASX:RIO) in its under-development Winu copper-gold province in the Great Sandy Desert.
Winu, which famously started the rush to grab land in the once-desolate East Pilbara after its discovery in 2017, will now be split 70-30 between Rio Tinto and Sumitomo.
Rio Tinto has been looking for viable Winu partners since as early as January this year.
There were several local options on the table – recently, The Australian had reported South32 and IGO were both interested – but it was Rio Tinto’s new Japanese partners that ended up inking the $615M deal earlier this week.
Sumitomo has already paid $195 million, with $204 million bundled into “deferred considerations” that will then activate at certain milestones.
The deal also saw both parties enter into a letter of intent which stipulates they now work together to develop broader strategic partnerships.
That agreement includes looking for more opportunities in copper and other metals.
The first big hurdle for the Rio Tinto-Sumitomo team-up though will be getting the Winu project underway. Expectations had originally set 2023 as the East Pilbara province’s start date, but approval delays and the Juukan Gorge disaster in May 2020 have seen things pushed back several times in recent years.
Rio Tinto today said the value of the mine will be huge once it gets rolling; the ASX-listed mining giant expects processing capabilities up to 10 million tonnes per annum. There’s an estimated 503 million tonnes of resources waiting to be uncovered, according to early reports, at 0.45% copper equivalent. Those same reports also identified higher-grade components of 188mt at 0.68% equivalent.
Rio’s copper CEO Katie Jackson said the rich Sumitomo deal has now “cemented the path forward for Winu” when it comes to delivering profitable growth as soon as possible.
“We will continue to advance the Winu project in close partnership with the Nyagumarta traditional owners and the Karlkayn airstrip with the Martu traditional owners in a way that benefits all parties,” Ms Jackson added.
Once operational, estimates put Winu’s mine life at around 40 years.
Rio Tinto opened at $119.05 today, down around 0.19% after the Winu news.
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