The Australian reported that Chinalco Yunnan Copper Resources will partner Rio Tinto in a project in northern Chile making its third such agreement for the region with the mining giant.

A Chilean subsidiary of Chinalco Yunnan will be able to earn a stake in the project by helping fund exploration work and will have an option to enter a joint venture with Rio. The Candelabro porphyry copper and molybdenum prospect is some 60 kilometers north of BHP Billiton's Cerro Colorado mine and covers about 4200ha.

Chinalco Yunnan said that the advanced project will be drilled ahead of the Caramasa and Palmani copper prospects in the region where it also has agreements with Rio to farm in to the projects. The company's subsidiary can earn a 40% stake in the Candelabro project with drill work and an investment of USD 8 million including a minimum spend of USD 250,000 in the first year after which Rio will have 90 days to either resume management of the project or grant the company a further three years to invest USD 15 million to take its interest to 60%. If Rio maintains its 60% controlling stake, then JV Company will be formed between the companies.

Chinalco Yunnan's largest shareholder is a majority owned unit of Aluminum Corporation of China which holds 21% interest and is also Rio's largest shareholder with 9% stake. Rio and Chinalco in June formed a joint venture to explore mainland China for copper and other minerals and the pair is also developing a prospective iron ore deposit in Guinea.

(Sourced from www.theaustralian.com.au)