July 29, 2010 (Chinavestor) Rio Tinto (NYSE:RTP), one of the three largest iron ore miners in the world, reached a major iron ore accord with Chinese rival Chinalco, parent of Aluminum Corp. of China (NYSE:ACH) known as Chalco, establishing a joint venture to manage an iron project in Guinea in West Africa.
Under the terms of the agreement, Rio Tinto (NYSE:RTP) will sell a 47% interest in the project to Chinalco's Chalco operation. Aluminum Corp. of China (NYSE:ACH) will provide $1.35 billion to fund development work in the Simandou project over the next two to three years, according to the New York Times.
Rio Tinto (NYSE:RTP) will own 50.35% of the project and Chinalco will own 44.65% with the World Bank owning the remaining 5%. Rio Tinto (NYSE:RTP) has had a touchy relationship with China over the years. The company scuttled a $19.5 billion investment in China last year after the government there arrested four Rio Tinto (NYSE:RTP) staffers and charged them with bribery.
Rio Tinto (NYSE:RTP) employs 1,100 workers in Guinea and has spent $650 million to develop the mine Aluminum Corp. of China (NYSE:ACH) will hold an interest in.