(Reuters) - Global miner Rio Tinto (L:RIO) inked a joint venture agreement with China Minmetals Corp [CHMIN.UL] on Thursday, as the companies look to explore mineral deposits in China.
The 50-50 joint venture with state-owned Minmetals follows a technical agreement signed in November when both parties committed to a collaborative partnership in mineral exploration.
Major miners have been seeking ways to maximise exploration budgets and have also been analysing the sustainability of their portfolios in light of the changing needs of China, the world's biggest commodity consumer, as its economy matures.
"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," said Rio Tinto chief executive J-S Jacques.
The registered capital of the venture will be $31.3 million (£23.39 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 immediate priority for the joint venture will be mineral targets in China," the company said, adding the future collaboration of the parties would expand to exploration of global resources.
Rio Tinto, the world's second-biggest listed miner by market capitalisation, and No. 1 BHP (AX:BHP) (L:BLT), are particularly dependent on iron ore, as a bulk commodity with high profit margins.
Minmetals, one of China's biggest metals firms, mostly produces copper, zinc and nickel, but also holds reserves of steelmaking raw material iron ore.