Under the agreement, which includes exclusivity obligations to work toward a binding definitive agreement, Rio Tinto will continue to develop and operate Winu as managing partner, and SMM will pay Rio Tinto $399 million for a 30% equity share of the project. This includes $195 million upfront and $204 million in deferred considerations contingent on milestones and adjustments to be agreed.

The parties have also entered into a letter of intent to develop a broader strategic partnership to work together to explore opportunities for commercial, technical and strategic collaboration across copper, other base metals and lithium. The Winu project is an attractive lowrisk, long-life copper-gold deposit discovered by Rio Tinto in 2017 that is highly prospective for expansion beyond the initial development. It is relatively close to Rio Tinto’s Pilbara iron ore assets.

“We share a long history with Sumitomo Metal Mining as partners and deeply value the commitment they will bring to the Winu project,” Rio Tinto Copper Chief Executive Katie Jackson said. “This is a unique opportunity to derisk our investment, as we work with an experienced partner. We look forward to working more broadly as strategic partners to find new ways to deliver value across the metals and minerals supply chain.”

Rio Tinto and SMM will now work to finalize definitive agreements for the Winu project joint venture in the first half of 2025, along with formalizing the broader strategic partnership. A pre-feasibility study for the Winu project with an initial development of processing capacity of up to 10 million metric tons per year is expected to be completed in 2025, along with the submission of an environmental review document under the EPA environmental impact assessment process.