Rio Tinto and Chinalco sign agreement to establish Guinea joint venture

Rio Tinto and Chinalco sign iron ore deal

LONDON — Anglo-Australian mining company Rio Tinto PLC and China’s state-owned Chinalco have signed a binding agreement to establish a joint venture to operate an iron ore project in Guinea in West Africa.

London-based Rio Tinto said Thursday that Chalco, a subsidiary of Chinalco, will acquire a 47 percent interest in the venture by providing $1.35 billion to fund development work in the Simandou project over the next two to three years.

Rio Tinto will hold 50.35 percent and Chinalco 44.65 percent, with the remaining 5 percent owned by the International Finance Corp., the financing arm of the World Bank.

The deal indicates that the relationship between Rio Tinto and China is improving after the company last year walked away from a $19.5 billion investment and four of its workers were arrested and charged with bribery.