Baker & McKenzie Advises Chinalco On Its Joint Venture With Rio Tinto To Develop The Simandou Iron Ore Mine In Guinea
Deal Announcement
March 22, 2010
Beijing, 22 March 2010 – Baker & McKenzie advised Aluminium Corporation of China (“Chinalco”), one of China’s largest aluminium companies, on its memorandum of understanding (“MOU”) with Rio Tinto for the joint development and operation of the Simandou iron ore project in Guinea, announced on 19 March 2010.
Currently, Rio Tinto holds 95 percent of the Simandou project and International Finance Corporation, the financing arm of the World Bank, holds the remaining 5 percent. Under the MOU, Chinalco and Rio Tinto will hold their interests in the Simandou project through a new joint venture entity. Chinalco will pay US$1.35 billion on an earn-in basis to acquire a 47 percent stake in the joint venture entity. The joint venture will also cover rail and port infrastructure.
The Baker & McKenzie team was led by Beijing-based partners Stanley Jia and Andrew Lucas.
Commenting on the deal, Mr. Jia said, “We are delighted to have acted for Chinalco on this landmark transaction. We continue to partner with Chinalco on its international expansion as well as advising other major Chinese state-owned companies on their global investments, including CNOOC on its recently announced US$3.1 billion investment in Argentina."
Mr. Lucas added "Our Chinese clients benefit not only from our extensive global network and experience in cross-border transactions, but also through our familiarity with the unique transaction issues and concerns faced by Chinese companies when making outbound investments.”
The Blackstone Group and China International Capital Corporation (CICC) acted as the financial advisers to Chinalco.