Sinosteel Corporation and Rio Tinto agree to extend their Channar Mining joint venture in Western Australia
Channar joint venture held 60% by Rio Tinto and 40% by Sinosteel signs a third extension on its offtake agreement under which Sinosteel imports iron ore from Western Australia to China
SINOSTEEL Corporation and Rio Tinto have agreed to extend their Channar Mining joint venture in the Pilbara region of Western Australia.
This third extension of the joint venture was signed at a ceremony held in Beiijing on November 24, attended by Sinosteel chairman Xu Siwei and Rio Tinto chief executive Jean Sebastien Jacques.
Under the terms of the deal, an additional 10 million tonnes of iron ore will be delivered into the joint venture from Western Australia. Under a thirty-year partnership more than 250 million tonnes of iron ore have already been delivered from the Pilbara region to China.
The original Channar joint venture was signed in 1987. This third extension will increase the life of the joint venture to cover production reaching 290 million tonnes.
The extension agreement 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.
The Channar joint venture is held 60% by Rio Tinto and 40% by Sinosteel. It 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 offtake rights.
“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,” comments Rio Tinto Iron Ore chief executive Chris Salisbury.
6 Dec 2017