Rio Tinto and Sinosteel extend Channar mining joint venture

Rio Tinto and China’s Sinosteel Corporation have extended their historic Channar Mining Joint Venture in Australia’s Pilbara region, the global mining company said.

It said in a statement that the Channar joint venture extension, together with a separate agreement for Rio Tinto to supply iron ore from the Pilbara, will enable sales of up to 70 million tonnes of iron ore to Sinosteel Corporation over the next five years.

“This extension will see 30 million tonnes of iron ore supplied into the joint venture, with Sinosteel making a one-off payment of US$45 million to Rio Tinto and providing additional production royalties linked to the iron ore price,” it said.

In a separate agreement, Rio Tinto will sell up to 40 million tonnes of iron ore to Sinosteel between 2016 and 2021.

“We place immense value on our long-term customer relationships and today’s agreements clearly demonstrate that Rio Tinto and Sinosteel remain committed to our mutually beneficial partnership,” Rio Tinto Iron Ore chief executive Andrew Harding said.

Sinosteel Corporation president Liu Andong said: “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.”

The joint venture extension is subject to certain conditions precedent being met, including West Australian, Australian and Chinese Government approvals.

The original Channar joint venture was signed in 1987 and provided for the production of 200 million tonnes of iron ore. It was later extended by 50 million tonnes.

The Channar joint venture (Rio Tinto share 60 per cent, Sinosteel share 40 per cent) owns the Channar mine in the Pilbara region of Western Australia. The mine is managed by Rio Tinto and the joint venture agreement provides Sinosteel with off-take rights for a volume of Pilbara Blend (into which Channar ore feeds) equivalent to Channar production.

 

Leave a Reply

Your email address will not be published.