Allens Arthur Robinson has advised international mining group Rio Tinto on the extension of its Channar Mining joint venture (Channar JV) with a Chinese state-owned metals trading house, Sinosteel Corporation.
The agreement is an extension of the historic 1987 deal in which Channar JV agreements for the production of 200 million tonnes of iron ore in the Pilbara region of Western Australia were signed. The deal was regarded as the first major Chinese foreign investment in the Australian mining industry.
The extension of the ground-breaking joint venture, sealed at a signing ceremony at the Diaoyutai State
Guesthouse in Beijing on 3 December, paves the way for a further 50 million tonnes of iron ore to be produced by the Channar JV at the Channar mine.
The Channar JV - in which Rio has a 60 per cent stake - owns the Channar mine and the arrangements for the extended term provide Sinosteel with 100 per cent take-off rights for Pilbara Blend product (into which Channar ore feeds).
Allens partner Nic Tolé led the matter, joining senior associate Mark McAleer in attending the Diaoyutai State Guesthouse signing ceremony alongside senior executives from Rio, Chinese Government officials and the Australian Ambassador to China.
Allens also advised Rio on the signing of a strategic cooperation framework agreement with Sinosteel for potential cooperation in, and joint development of, iron ore opportunities in and around the Channar mine.
Chambers & Company acted for Sinosteel Corporation.
Allens has also advised Rio Tinto on its non-binding Memorandum of Understanding (MoU) with Aluminum Corporation of China (Chinalco) to establish a landmark exploration joint venture in China.
The new Rio-Chinalco joint venture, announced on Friday (3 December) and expected to come into operation in the first half of 2011, will allow the two companies to explore mainland China for quality mineral deposits.
Under the proposed arrangements, Chinalco will hold a 51 per cent interest in the joint venture, with
Rio Tinto holding the remaining 49 per cent stake.
Partner Scott Langford, who is leading the Allens team advising on the matter, said: "Combining Rio Tinto's expertise with Chinalco's deep understanding of the Chinese exploration environment makes a lot of sense."
The MoU announcement follows on from this year's joint venture agreement between Rio Tinto and Chinalco on the Simandou project.
Clifford Chance (Beijing) acted for Chinalco.
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