Rio Tinto and Sinosteel have signed a heads of agreement to advance negotiations for a second extension to the Channar Mining iron ore joint venture (JV) in Western Australia's Pilbara region.
The original Channar JV, which was signed in 1987, allowed for the production of 200 million tonnes (Mt) of iron ore.
This rate was extended in 2010 by an additional 50Mt of iron ore.
Rio Tinto chief executive Sam Walsh said: "The Channar JV was a ground-breaking partnership formed in the early stages of the development of the Chinese steel industry.
"It's now one of China's longest running and most successful partnerships with Australia and a model for economic co-operation between our two countries.
"The signing demonstrates the commitment by Rio Tinto and Sinosteel to continue exploring opportunities that build on a mutually beneficial partnership that has developed over many years."
Rio Tinto owns a 60% stake in the JV and Sinosteel holds the remaining 40%.
Channar mine is located 60km south of Tom Price in the Pilbara region and sits in the Hamersley Group, which comprises Archaean and Proterozoic age rock formations. The mine is owned by the JV and operated by Rio Tinto, while Sinosteel has all production rights.
The firms will have to reach mutually acceptable terms on the new extension before the previous one expires, around 2016.
First ore was produced from Channar mine in January 1990 and full design capacity of 10Mt a year was accomplished in 1998.
Image: Rio Tinto chief executive Sam Walsh. Photo: courtesy of Rio Tinto.