The Aluminum Corporation of China Limited (Chalco), the country’s top producer of the metal, signed a binding agreement with the world’s mining giant Rio Tinto Thursday to set up a joint venture (JV) for the development of the Simandou iron ore mine in Guinea.

The Simandou iron ore mine is estimated to have an annual output of over 70 million tonnes.

The binding agreement follows the signing of a memorandum of understanding between Rio Tinto and Chalco’s parent company Chinalco in March.

Under the agreement, Rio Tinto’s 95-percent interest in the Simandou project will be held by the new JV.

“Chalco will acquire a 47-percent interest in the JV by providing 1.35 billion U.S. dollars on an earn-in basis through sole funding of ongoing development work over the next two to three years,” a statement posted on Rio Tinto website read Thursday.

Once Chalco has paid the 1.35 billion U.S. dollars, the effective interests of Rio Tinto and Chalco in the Simandou project will be 50.35 percent and 44.65 percent, respectively, it said. The remaining five percent will be held by the International Finance Corporation, the financing arm of the World Bank.

Trading of Chalco shares have been suspended since Wednesday on both the Shanghai and Hong Kong bourses due to the company’s involvement in negotiations of “a major issue,” but trading was likely to resume Friday, it said in a statement to the Shanghai Stock Exchange.