Rio Tinto extends Sinosteel joint venture for third time

Rio Tinto and China's Sinosteel Corporation have agreed to extend their Channar Mining joint venture, the pair announced on Friday.

The third extension of the joint venture, confirmed in Beijing by Rio Tinto chief executive J-S Jacques and Sinosteel chairman Xu Siwei, would see an additional 10 million tonnes of iron ore delivered into the venture from Western Australia.

FTSE 100 firm Rio Tinto said the extension would see Sinosteel make an upfront payment of $15m to it, as well as production royalties linked to the iron ore price.

It remained conditional on approvals from the Western Australian, Australian and Chinese governments.

“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,” said Rio Tinto Iron Ore chief executive Chris Salisbury.

“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 original Channar joint venture was signed in 1987 and provided for the production of 200 million tonnes of iron ore.

Rio Tinto said the third extension would increase the life of the joint venture to cover production totalling 290 million tonnes.