Rio Tinto, Sinosteel Sign Iron-Ore Supply Deals

   By Rhiannon Hoyle 
 

SYDNEY--Rio Tinto PLC (RIO.LN) said it has inked new agreements with China's Sinosteel Corp. to sell the state-owned steel company iron ore from Australia's remote Pilbara mining region until the end of the decade.

The Anglo-Australian miner said it and Sinosteel have agreed to extend their Channar Mining joint venture--which is 60% owned by Rio Tinto and 40% by Sinosteel, and was first formed in 1987 for the joint development of the Channar mine in northwest Australia. Under that extension, Rio Tinto will supply the joint venture with 30 million metric tons of iron ore over the next five years, in exchange for a one-off payment by Sinosteel of US$45 million and production royalties linked to the iron ore price.

Rio Tinto iron-ore chief executive Andrew Harding said the Channar agreement is "one of the most important deals not only for our business, but for Australia's economic ties with China."

The mining company said a separate deal has also been signed, under which it will sell up to 40 million tons of iron ore to Sinosteel between 2016 and 2021.

Write to Rhiannon Hoyle at [e-mail]

(END) Dow Jones Newswires

April 14, 2016 19:06 ET (23:06 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.