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Rio Tinto, Chinalco sign joint venture for Simandou in Africa

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Rio Tinto, the giant mining company, struck a deal with Aluminum Corporation of China (Chinalco) on Friday to develop the Simandou iron ore reserve in Guinea in West Africa.

The joint venture agreement covers rail and port infrastructure as well as the mine itself, Rio Tinto said in a statement on Friday.

Rio Tinto owns 95 percent of the Simandou project, with another five percent owned by the World Bank.

According to the agreement, Chinalco will acquire a 47 percent interest in the project by providing 1.35 billion Australian dollars in an earn-in basis through sole funding of ongoing development during the next two to three years.

"We have long believed that Rio Tinto and Chinalco could work together on major projects for mutual benefit," Rio Tinto's Chairman Tom Albanese said in a statement.

Albanese described Chinalco as an "excellent partner" at Simandou.

Simandou is a huge iron ore project in south eastern Guinea.

"We believe the Simandou project is a large scale, long life asset and is the single best undeveloped source of high grade iron ore," Albanese said.

"Rio Tinto and Chinalco will now work on finalising definitive and binding transaction documentation," the statement said.

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