Australia-based Rio Tinto, the world's second biggest iron ore producer, has announced that it has signed a non-binding agreement with China's largest metal producer Aluminum Corp. of China (Chinalco) to sell its entire stake in the Simandou iron ore project in Guinea to Chinalco. The heads of agreement sets out the proposed principal terms of the sale with the aim of signing a binding agreement within six months.
According to Rio Tinto’s statement, it will receive payments of $1.1-1.3 billion based on the timing of the development of the project. The initial payment for shares will commence at the time of first commercial production, on a per metric ton basis.