BEIJING - Sinosteel Corporation and the global miner Rio Tinto Group on Friday agreed to extend their Channar mining joint venture in Western Australia to produce a further 50 million tons of iron ore from 2012 to 2017.
The joint project, in which Sinosteel owns a 40 percent stake and Rio Tinto the remainder, currently produces 10 million tons of iron ore a year. It is expected to achieve an initial output target of 200 million tons by the second quarter of 2012. Initiated in 1987, the project has supplied an accumulative 183 million tons of iron ore to China, Sinosteel said.
"The extension of the Channar joint venture shows that the commercial relationship formed between China and Australia two decades ago has evolved into a mutually beneficial partnership," said Duncan H Calder, partner in charge of China Business Practice, KPMG Australia, an adviser to Sinosteel on the deal.
As one of the earliest, and largest, investments made by a Chinese company in Australia, the Channar project has made a major contribution to the marketing of Australian iron ore in China and the prosperity of the local economy, said Huang Tianwen, president of Sinosteel Corp. "The long-term friendly cooperation between Sinosteel and Rio Tinto has become a model for Sino-Australian economic interaction," he said.
Overseas development has always been a key strategy for Sinosteel, which is now China's largest iron ore trader, according to Huang. The Chinese company now has iron ore and chrome ore resource bases in Australia and South Africa.
The deal is the latest milestone in Rio Tinto's long history of close ties with China, now its largest single market, said Sam Walsh, Rio Tinto's chief executive Iron Ore and Australia.
"Rio Tinto first sent a shipment of iron ore from the Pilbara (the Western Australian mining region in which the Channar mine is located) to China in 1973, and the proven strength of a mutually rewarding partnership built on those early days has stood the test of time," said Walsh.
