[Image courtesy of www.riotinto.com]
CBI member Rio Tinto and Chinalco's listed subsidiary Chalco recently completed the formation of their joint venture to develop and operate the Simandou iron ore project in Guinea, following the completion of all Chinese regulatory approvals.
A consortium led by Chalco made an earn-in payment of US$1.35 billion, in line with an agreement reached with Rio Tinto in March 2010. Rio Tinto and the Chalco consortium now hold a 53% and 47% interest, respectively, in the joint venture, which translates into a 50.53% and 44.65% interest in the Simandou project. The International Finance Corporation holds the remaining 5%. The Government of Guinea retains its options for participation in the project, and is expected to take up its first share in the near future.
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