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Rio Tinto is a leading international mining group that finds, mines and processes the earth's mineral resources.
The Group's major products include aluminium, copper, diamonds, energy products, gold, industrial minerals (borates, titanium dioxide, salt and talc), and iron ore. Its activities span the world but are strongly represented in Australia and North America. There are also significant businesses in South America, Asia, Europe and southern Africa.
Rio Tinto Inks Innovative Deal With Australian Mine Developer Iron Ore Holdings
Rio Tinto’s (LSE: RIO) Iron Ore subsidiary has agreed a deal with Iron Ore Holdings (ASX: IOH) (‘IOH’), whereby Rio will purchase up to 1.5 million tonnes of iron ore annually from IOH’s Phil Creek deposit in the Pilbara region of Western Australia. The innovative deal also opens the potential for Rio to acquire a stake in IOH’s Iron Valley deposit.
The new exclusive negotiating agreement between Rio Tinto and IOH, allows Rio to examine the iron ore deposit for a period of up to 6 months, raising the possibility that Rio may invest in or potentially acquire all of the Iron Valley deposit from IOH.
Also today, IOH announced an upgraded resource for the Iron Valley deposit, IOH revealed a 20% increase in its JORC resource estimate to 191million tonnes (Mt) at 59% Fe.
Key commercial terms have been reached on an ore sales agreement for the Phil’s Creek Project with Rio Tinto. Ore from IOH’s Phil’s Creek deposit will be sold to Rio Tinto under an innovative mine-gate sale process. Under the agreement, up to 1.5 million tonnes will be delivered annually to Rio Tinto, who will then transport it to the coast for shipment as part of Rio Tinto’s product suite.
IOH is expected to commence mining in late 2010.
"This is a significant development for Rio Tinto, IOH and the Pilbara generally. It is a prime example of how a major established producer and a small, progressive junior can work together to achieve an excellent outcome for all stakeholders ..." Rio Tinto Iron Ore chief executive, Sam Walsh said. "Rio Tinto welcomes the opportunity to also examine the larger Iron Valley deposit and establish whether it can be best developed within our integrated system of 11 mines, 1,300-kilometre rail network and three ports”
In Australia, shares in Iron Ore Holdings climbed 6% after announcing the news. The Pilbara based mine developer also updated investors on its Buckland Hills Project in West Pilbara.
The property’s first drill campaign which covered a total of 41 drill holes for a total of 1,390 metres. Mineralisation was encountered over a length of 1,200m and up to 500m wide, with a zone of high-grade channel ore mineralisation with intersected thicknesses of up to 58m.
