PERTH (miningweekly.com) – Mining major Rio Tinto has extended its joint venture (JV) agreement with China’s Sinosteel Corporation in the Pilbara.
The miner said on Friday that the extension of the Channar mining JV, as well as a separate agreement under which Rio would supply iron-ore from the Pilbara, would enable the sale of up to 70-million tonnes of iron-ore to Sinosteel over the next five years.
“In the 50 years that we have been exporting iron-ore from the Pilbara, the Channar JV stands out as one of the most important deals not only for our business, but for Australia’s economic ties with China,” said Rio iron-ore CEO Andrew Harding.
“Now in its thirtieth year, it is one of the longest running and most successful partnerships between the two nations.”
The original Channar JV was signed in 1987 and provided for the production of 200-million tonnes of iron-ore. It was later extended by an additional 50-million tonnes.
The latest extension would see 30-million tonnes of iron-ore supplied into the JV, with Sinosteel making a one-off payment of $45-million to Rio, and providing additional production royalties linked to the iron-ore price.
In addition, a separate agreement would see Rio sell up to 40-million tonnes of iron-ore to Sinosteel between 2016 and 2021.
Sinosteel president Liu Andong said on Friday that the extension of the JV marked another milestone in trade cooperation between China and Australia.
“The relationship between Sinosteel and Rio Tinto has demonstrated the ability of our companies and both nations to sustain significant long-term joint commercial activities for the benefit of all concerned.”