Australian miner Rio Tinto has announced that it has agreed with Chinese steelmaker Sinosteel Corporation to extend their historic Channar mining joint venture (JV) in the iron ore-rich Pilbara region of Western Australia, to produce a further 10 million mt of the resource.
Chris Salisbury, Rio Tinto’s iron ore division chief executive, stated that the Channar joint venture is one of Australia’s most significant trading partnerships and has helped pave the way for the incredibly strong relationship the company has forged with China today and this extension represents another milestone in the two companies’ 30-year partnership that has seen more than 250 million mt of iron ore delivered from the Pilbara to China.
The extension will see Sinosteel make an upfront payment of US$15 million to Rio Tinto as well as production royalties linked to the iron ore price. It is conditional upon approvals from the Western Australian, Australian and Chinese governments.
The original Channar joint venture was signed in 1987 and provided for the production of 200 million mt of iron ore. This third extension will increase the life of the joint venture to cover production totaling 290 million mt.