Rio announces joint venture with Chinese miner

Chinalco and Rio Tinto have announced a joint venture (JV) to explore mainland China for world-class mineral deposits.

The JV is subject to Chinese regulatory approvals and once established will operate under the name Chinalco Rio Tinto Exploration Co. Ltd. (CRTX).

Chinalco president Xiong Weiping and Rio Tinto chief executive Tom Albanese executed the joint venture contract today during a signing ceremony in Beijing.

CRTX will first focus on copper exploration, with the possibility to also explore for coal and potash.

 "Access to natural resources is a critical component to many of the world’s leading economies,” Chinalco president Xiong Weiping said.

“Drawing on the respective strengths of both companies, this exploration JV could potentially create commodity supplies to benefit the global economy.”

Rio Tinto chief executive Tom Albanese said the venture between the two companies is indicative of the importance of China to the Australian resource sector.

"The formalisation of our exploration JV is an important milestone in the expanding relationship between Rio Tinto and China,” he said.

“Given that mainland China is highly prospective, the JV has the potential to create valuable opportunities for both partners."

The two parties both believe the JV is an opportunity to align initiatives from the Ministry of Land and Resources that potentially allow selected explorers access to prospective areas in various parts of China.

CRTX combines business expertise from a leading Chinese company with leading-edge technologies with Rio’s global mining and exploration experience.

Chinalco will hold a 51 per cent interest in the JV while Rio Tinto will hold a 49 per cent interest.

Chinalco will nominate three directors including the chairman plus the chief financial officer, deputy general manager and compliance supervisor.

Rio Tinto will appoint two directors and the general manager, who will be responsible for day-to-day operations.

It is expected the CRTX headquarters will be in Beijing.

The announcement follows the December 2010 signing of a non-binding Memorandum of Understanding by Chinalco and Rio Tinto to establish an exploration joint venture in China.

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