It is reported that iron ore miners Gindalbie Metals Ltd and Sinosteel Midwest Corp have agreed to share infrastructure and mine services in Western Australia's midwest region.

The agreement aims to improve the economics of Gindalbie's Karara project and Sinosteel Midwest's nearby Koolanooka/Blue Hills project, Gindalbie said in a statement.

Gindalbie said that “The arrangement would reduce capital costs and lead to lower operating costs through economies of scale, especially in relation to ore transport.”

Gindalbie said the agreement set a benchmark for collaboration between resource groups in the region, which is set to become a significant new mining hub.

Gindalbie and its equal joint venture partner, Chinese steel maker Ansteel, recently commenced construction of the Karara project and are targeting first production in 2011.

Sinosteel took control of Midwest Corporation in 2008 - the first state-owned Chinese entity to make a hostile takeover bid for a listed Australian resources company. Sinosteel Midwest received final approval for its Koolanooka/Blue Hills project last month and aims to commence mining before the end of this month.

(Sourced from money.ninemsn.com.au)