MELBOURNE, Australia--Rio Tinto PLC again extended its long-running iron-ore mining venture with China's state-owned Sinosteel Corp. to deliver more of the steel-making commodity from Australia's remote western Pilbara region.
The agreement will deliver an additional 10 million metric tons of iron ore from their Channar mine, building on a deal that was the first large-scale mining initiative between the two countries.
Sinosteel will make an upfront payment of US$15 million to Rio Tinto, as well as production royalties linked to the iron-ore price, the Anglo-Australian company said Friday.
The extension will increase output to 290 million tons from the Channar operation, which is managed and 60% owned by Rio Tinto and provides the Chinese steel company with rights to volumes of ore from the Pilbara.
When it was signed in 1987, the original agreement provided support for the development of a mine targeting production of 200 million tons thanks to what was the first overseas minerals project investment by a Chinese enterprise. The scope of the venture was increased in 2010 by a further 50 million, and then last year the companies agreed to again extend it by 30 million tons.
"This extension represents another milestone in our 30-year partnership that has seen more than 250 million tons of iron ore delivered from the Pilbara to China," Rio Tinto iron ore Chief Executive Chris Salisbury said.
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(END) Dow Jones Newswires
November 23, 2017 17:56 ET (22:56 GMT)