Rio Tinto and Chinalco sign iron ore JV

The venture in Simandou, Guinea, not binding at this stage, marks a turnaround for the companies after Rio last year scrapped a $19.5 billion tie-up with the state-owned Chinese firm -- a falling-out that also bruised Sino-Australian ties.

The new alliance, rumoured for some time, comes just days before four Rio Tinto employees stand trial in China on charges of commercial spying during price talks with Chinese mills last year. Rio Tinto has said its workers are innocent of the charges.

Rio Tinto, the world's No. 2 iron ore producer, has remained a big supplier of the ore to China and is again locked in discussions to set prices for the next 12 months.

With spot market prices for iron ore surging in the last year, the world's big miners are pushing steel mills to accept one of the highest annual price hikes on record.

Brazil's Vale , the only iron ore producer larger than Rio Tinto, has asked mills to pay 90 percent more for ore this year.

Iron ore suppliers were making unreasonable price demands on China's steel makers, the chairman of Chinese metals trading house Sinosteel, Huang Tianwen, said.

Huang Tianwen also said such demands were unfavourable to the relationship between Chinese steelmakers and suppliers.

However, the trial of the four Rio Tinto staff -- slated to start on Monday in Shanghai -- will not influence the sensitive iron ore price negotiations, Australian Trade Minister Simon Crean said on Friday.

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