JV exploration deal with China’s Minmetals World’s No. 2 miner Rio Tinto (ASX, LON:RIO) has joined forces with Minmetals, one of the biggest Chinese mining companies, to explore for mineral deposits first in the Asian country and then the rest of the world .
The 50-50 joint venture with state-backed Minmetals follows a technical agreement signed in November, when both parties committed to collaborative search for new ore bodies.
“The formalization of the exploration joint venture is an important milestone in our growing partnership with China and Minmetals, who is an increasingly important player in the global mining industry,” Rio Tinto’s chief executive, Jean-Sbastien Jacques, said in the statement.
The joint venture will look for new mineral deposits first in China and then the rest of the world.
The registered capital of the venture will be $31.3 million, with initial contributions of $5.5 million by each of the companies within six months of establishment of the venture, Rio Tinto said.
The partnership replaces a long-running exploration venture Rio terminated last year with its largest shareholder, Aluminum Corporation of China.
Minmetals, which mostly produces copper, zinc and nickel, but also holds reserves of iron ore, has increased its reach as of late.
The company is the majority shareholder in Australian-based miner MMG, which operates the giant Las Bambas copper mine in Peru. And market rumours indicate it may try buying out the minority shareholders of Canada’s Turquoise Hill, which is controlled by Rio and is currently developing the giant Oyu Tolgoi copper mine in Mongolia.
In the past few years, Beijing has stepped up efforts to shore up its dominance as a global metals supplier as well as to secure control of key resources to fuel its high-tech electronics industry and growing electric cars sector.