SYDNEY (Commodity Online): Australian miner, Rio Tonto Limited (ASX:RIO) has joined hands with China-based Chinalco to develop a large iron ore field in Africa with Chinalco acquiring 47% in the Simandou project in Guinea, which was put on hold due to political uncertainty in the country.

In a statement issued later in the day, Rio stated that the non-binding agreement comes after the company snubbed a massive Chinalco cash injection last June, and just days before four of its employees are tried over alleged bribery and industrial espionage during iron ore contract negotiations.

"We have long believed that Rio Tinto and Chinalco could work together on major projects for mutual benefit," Rio chief executive Tom Albanese said in a statement.



According to an estimate, Simandou mine contains an estimated 2.5 billion tonnes of high quality iron ore and could produce 200 million tonnes per year, matching Rio's entire Western Australian Pilbara operation.

Rio said the project, which involves building a mine, railway and port, would create large number of employment in the country. "We believe the Simandou project is a large scale, long life asset and is the single best undeveloped source of high grade iron ore,” said the company official.

However, Rio stocks closed in losses on australian bourses. The stock price fell by over 1% to AUD 76.19. But the stock has been on the rise over past one month gaining as much as 7% during the period.

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