Rio Tinto and Sinosteel have agreed to extend a 30-year joint venture partnership for its Western Australia iron ore operations.
The Channar Mining Joint Venture, which Rio Tinto owns 60% and Sinosteel owns 40%, is the joint ownership of the Channar mine in the Pilbara Region of Western Australia.
The Joint Venture partnership provides Sinosteel Corporation with off-take rights for a volume of Pilbara Blend equivalent to Channar production.
Through the extension, which is the third since the partnership was established back in 1987, an additional 10 million tonnes of iron ore delivered from the mine.
Over the 30-year partnership, the Channar Joint Venture has seen more than 250 million tonnes of iron ore and the increased life of the joint venture will cover production totalling 290 million tonnes.
Rio Tinto Iron Ore chief executive Chris Salisbury said “The Channar joint venture is one of Australia’s most significant trading partnerships and has helped pave the way for the incredibly strong relationship we have forged with China today. This extension represents another milestone in our 30-year partnership that has seen more than 250 million tonnes 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.