Rio Tinto Ltd’s [ASX:RIO] share price increased by 0.73% on Friday, 8 June. The mining company’s shares closed at $86.60, up from $85.97 on Thursday, 7 June.
Global miner Rio’s share price strengthened after announcing a joint venture with China Minmetals, a Chinese metals and mineral trading company based in Beijing.
Rio Tinto’s Joint Venture with China Minmetals
The partnerships been in discussion since early last year, when both parties signed a Technical Collaboration Contract in November 2017, committing to look for potential areas of future co-operation.
Friday last week, Rio confirmed in a trading update that they have entered a ‘Joint Venture Contract to establish a 50:50 joint venture to explore for world-class mineral deposits in China.’
The registered capital of the collaboration will be US$31.3 million, with initial contributions of US$5.5 million within approximately six months by each party. All further contributions will be subject to unanimous approval.
Both companies see the benefit of the partnership to maximise their exploration budget. Rio Tinto chief executive Jean-Sébastian Jacques said:
‘The formalisation 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. Our complementary strengths in exploration put us in the best possible position to find metals and minerals essential to human progress.’
China Minmetals Corporation president Guo Wenqing said:
‘The collaboration is very significant to Minmetals. Rio Tinto has rich prospecting experience and great discoveries worldwide, while Minmetals has solid technical expertise and extensive experience — the two strong partners will drive breakthroughs, pioneer progress, and promote the exchanges and collaboration of the global resource industry.’
What’s next for Rio Tinto and China Minmetals?
The immediate focus for the joint venture is mineral resources in China, with future expansion into the exploration of global resources.
With Rio Tinto being one of the world’s largest and most powerful mining corporations and China Minmetals one of China’s biggest metal companies — holding some of the world’s largest reserves of copper, zinc, nickel and tungsten — this collaboration will hopefully make for a powerful duo.
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