SMM and Rio Tinto Forge Ahead with Copper Project Joint Venture in Australia

Sumitomo Metal Mining

Sumitomo Metal Mining (SMM), a prominent Japanese metals producer, is poised to acquire a 30% stake in Rio Tinto’s Winu copper-gold project located in Western Australia's Pilbara region. The companies have signed a term sheet which includes a significant initial investment of $195 million by SMM.

Details of the Deal

The transaction, expected to close in the first half of 2025, marks a substantial step for SMM as it looks to bolster its copper production capabilities. The Winu project, still in the pre-feasibility and environmental approval stages, promises to significantly contribute to SMM’s long-term goal of producing 300,000 tons of copper annually. However, the specific timeline for when copper production will begin remains unclear, with further assessments of the project's output currently underway. The estimated combined resource volume stands at approximately 2.8 million tons.

SMM's strategic interest in the project extends beyond mere ownership; the firm also aims to offtake copper produced at Winu, with discussions about the volume and potential export scenarios ongoing. Exporting to Japan is considered highly likely.

Broader Context

This move aligns with broader Japanese governmental efforts to increase the country's base metal self-sufficiency, which is targeted to reach 80% by 2030. However, recent reports from Japan's Ministry of Trade and Industry (Meti) suggest that the strategy may be lagging behind its targets. To counter these challenges, Meti is enhancing support for domestic companies to expand their copper supply chains globally, including new initiatives in Africa and a strategic partnership with Peru to solidify copper procurement.