The move also marks the end of the stalemate between China and the global miner on cooperation after ties soured in June this year.
The Simandou project will have a production capacity of 70Mt/y. Chinalco is still Rio’s largest shareholder with a 9.3% stake. The Chinese company signed a non-binding accord in March this year to pay $1.35bn over two years for a 44.65% stake in the Guinean iron ore project.
Rio said Simandou has the world’s largest untapped iron ore deposits and nearly 2.25bnt of iron ore resources. It expects to produce 70Mt of ore from the project over the next five years.
Chinalco’s subsidiary Chalco’s domestic aluminum market share fell to 36% last year, from 96% in 2005. It reported a loss of RMB4.64bn ($684.8M) in 2009.
Rio’s relations with China hit a rough patch after four Rio Tinto employees from Shanghai, inclu-ding an Australian Stern Hu, were detained for bribery and commercial espionage during annual iron ore price talks.