Rio Tinto Ltd and Chinalco (中國鋁業), China’s largest alumina producer, yesterday signed a memorandum of understanding to set up a joint venture to explore resources in China, the Anglo--Australian mining giant said.
The venture, in which Chinalco will hold a 51 percent stake, while Rio will take the remaining 49 percent, will “explore mainland China for world-class mineral deposits,” Rio said in a statement.
“The combination of skills provided by Rio Tinto and Chinalco offers great potential to unlock value for mutual benefit,” the statement quoted Rio Tinto chief executive Tom Albanese as saying at a signing ceremony in Beijing.
The joint venture, expected to come into operations in the first half of next year, will start with three to five large exploration projects and potentially move to additional regions later on.
Rio will appoint the chief executive of the new venture, with the chairman of the five-member board nominated by Chinalco, according to the statement.
Chinalco is seeking to diversify from aluminum into other sectors such as coal, iron ore, rare earths and copper to become a global mining firm.
Chinalco’s listed unit Chalco and Rio Tinto in July signed a binding agreement to jointly develop a huge African iron ore field, with the Chinese company to invest US$1.35 billion in the project.
The deal is also the latest sign of a recovery in Rio’s relations with China, its biggest customer, after four of its staff were jailed in Shanghai for bribery and stealing commercial secrets earlier this year.
The case, which followed Rio’s decision to scrap a tie-up last year with Chinalco, its shareholder, rattled relations between Beijing and Canberra and stoked concern among foreign investors about the rule of law in China.