Quick Take: Rio Tinto, Minmetals Plan Joint Exploration Venture

Australian mining giant Rio Tinto Group joined forces with China’s state-owned China Minmetals Corp. to prospect for mineral deposits in China.

The two mining majors said Thursday they plan to set up a 50-50 joint venture for mining exploration. The first targeted region will be China’s resources-rich Xinjiang Uyghur Autonomous Region in the sparsely populated northwest.

Xinjiang had proven reserves of 2.63 billion tons of iron ore and 9.07 million tons of copper as of the end of 2015, according to data from local land and resources authority.

The joint venture will have a registered capital of 200 million yuan ($31million). The parties will initially contribute 35 million yuan each to the joint venture within six months after the establishment of the new venture, according to the companies.

A Rio Tinto source told Caixin that the new venture is pending regulatory review that may take one to two months to complete.

The joint venture follows a technical agreement signed by Rio Tinto and Minmetals in November on collaboration in mineral exploration.

Rio Tinto set up a China joint venture in 2011 with another state-owned mining giant, Aluminum Corp. of China (Chinalco), in which the Australian company holds a 49% stake. The venture was planned to focus on exploration for copper, potash and coal.

However, sources close to the matter said the Chinalco-Rio Tinto venture has seen little progress in mining exploration and both parties have decided to terminate the joint venture.

Contact reporter Han Wei (weihan@caixin.com)