Rio Tinto has struck a deal with Sumitomo to build a new copper and gold mine in WA
The Rio-Sumitomo deal values Winu at more than $2bn and comes just days after gold miner Northern Star agreed to pay $5bn for De Grey’s Hemi project.
Rio Tinto has struck a deal with Sumitomo to build a new copper and gold mine in Western Australia, after years of speculation about whether the project is big enough to fit in the mining giant’s grand plans.
Sumitomo has agreed to pay $US399m ($615.3m) for a 30 per cent stake in the Winu copper-gold project in the Great Sandy Desert about 120 kilometres from the Telfer gold and copper operations Newmont has sold to Andrew Forrest-backed Greatland Gold.
The Rio-Sumitomo deal values Winu at more than $2bn and come just days after gold miner Northern Star agreed to pay $5bn for De Grey’s Hemi project near Port Hedland in WA.
Greatland is on the cusp of completing its $US475m acquisition of Newmont’s Telfer mine and the remaining 70 per cent stake in the Havieron gold-copper project, amid the flurry of corporate activity focused on WA’s remote Paterson Range.
Rio expects to complete a pre-feasibility study based on initial development of processing capacity of up to 10 million tonnes a year at Winu in 2025 along with an updated approval application to WA’s Environmental Protection Authority.
It is understood 10 million tonnes is just a starting point for what Rio and Sumitomo hope will become a much bigger operation.
Documents Rio submitted to WA’s environmental watchdog last year suggests a mine life of up to 41 years.
The Winu discovery in 2017 sparked a massive land grab across the Paterson Range with Rio boosting its exploration footprint from 1000 square kilometres to 12,000 square kilometres.
The discovery was dubbed Rio’s “copper whopper” after the company’s exploration team on the ground famously pooled their credit cards to pay costs in the rush to lodge tenement applications.
On top of the Winu deal, Rio and Sumitomo have flagged a broader strategic partnership to work together on copper, other base metals and lithium on a commercial, technical and strategic basis.
Rio said Winu project was an attractive low-risk, long-life copper-gold deposit with a lot of potential for expansion beyond the initial development. It sits about 300km from the nearest of Rio’s vast iron ore operations in the Pilbara, which include mines, rail lines and ports.
Winu has been flagged as a mid-size mine by Rio standards, which led to talk of a sale to a mid-tier or smaller miner. Rio considered selling all of the project as well as partnerships with smaller, more nimble miners active in WA.
The mine plans revealed to date involve a development footprint of almost 40,000 hectares and include open pit mining below the water table.
Rio has raised the prospect of creating a network of mines within a single system at Winu and has been in talks with two traditional owner groups – the Nyangumarta and the Martu – about developing the project.
Rio even flew leaders from the Nyangumarta community – unfamiliar with dealing with mining companies unlike some other traditional owner groups in WA – to its vast Oyu Tolgoi operations in Mongolia to help them “understand the impacts of an operating copper mine”.
Rio and Sumitomo aim to finalise the Winu deal in the first half of 2025 and to formalise their broader strategic partnership.
Rio copper chief eprxecutive Katie Jackson said the miner had a long history of working in partnership with Sumitomo, including their previous ownership of the Northparkes copper mine in NSW.
“This is a unique opportunity to de-risk our investment, as we work with an experienced partner,” she said.
“We look forward to working more broadly as strategic partners to find new ways to deliver value across the metals and minerals supply chain.”
Sumitomo Metal Mining executive Hideyuki Okamoto said the Winu project was highly attractive and that Sumitomo was “excited to explore further opportunities for collaboration given the strong alignment between our companies”.
Rio most recent inferred mineral resource for Winu was 721 million tonnes at 0.4 per cent copper and 0.34 grams per tonne gold.
Rio has said the study work to date suggested the copper mineralisation supported the development of a relatively shallow open-pit mine.
Importantly for Rio and the potential size of the mine, the deposit remained open at depth as well as to the north and southeast.
The results published to date suggest Winu is much smaller than Rio’s Resolution copper project in Arizona. The copper grades at Resolution (1.89 per cent) are also much higher.
Rio Tinto shares closed up 0.9 per cent on Wednesday at $120.08.