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 Mt of iron ore to Sinosteel Corporation over the next five years.
This extension will see 30 Mt 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.
In a separate agreement, Rio Tinto will sell up to 40 Mt of iron ore to Sinosteel between 2016 and 2021.
[quote]In a ceremony witnessed by Australian Prime Minister Malcolm Turnbull and Chinese Premier Li Keqiang at the Great Hall of the People in Beijing, Rio Tinto Iron Ore chief executive Andrew Harding and Sinosteel Corporation president Liu Andong signed the Channar agreement, officially extending the long-established relationship between both companies until the end of the decade.
“In the 50 years that we have been exporting iron ore from the Pilbara, the Channar joint venture stands out as one of the most important deals not only for our business, but for Australia’s economic ties with China. Now in its 30th year, it is one of the longest running and most successful partnerships between the two nations,” Harding said.
“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.”
Sinosteel Corporation president Liu Andong added: “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.