Firms: Allens (Rio Tinto); Chambers Lawyers (Sinosteel Corporation)
Deal: Rio Tinto and Sinosteel Corporation extended their Channar Mining joint venture.
Value: US$45 million
Area: Joint venture
Key players: The Allens team was led by partner Mark McAleer (pictured).
Deal significance: Rio Tinto and Sinosteel Corporation have extended their historic Channar Mining joint venture in Australia’s Pilbara region.
The Channar joint venture extension will see 30 million tonnes 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.
This will bring the joint venture total to 280 million tonnes, and will conclude the joint venture with the end of the commercial reserves at Channar.
In a separate agreement, Rio Tinto will sell up to 40 million tonnes of iron ore to Sinosteel between 2016 and 2021.
The extension remains subject to approvals from the Foreign Investment Review Board and Western Australian Government.
Channar was China’s first major overseas investment, which was negotiated between former prime minister Bob Hawke and the Chinese Premier in 1983 according to Chambers Lawyers, which has been advising on the project since 1984.
“The Channar Mining joint venture was the first large-scale mining initiative between our two countries and is a cornerstone of Chinese and Australian trade,” said Sinosteel Corporation president Liu Andong.
“The extension of the joint venture marks another milestone in trade cooperation, especially in the current economic climate.”
Allens has been working with Rio Tinto on the Channar joint venture since 1987.
“This deal highlights the continued importance of the economic relationship between China and Australia, despite the recent softening of resources-focused investment and commodities prices,” Mr McAleer said.