Ginalbie seals $92b iron ore deal to supply China

Gindalbie Metals has sealed one of Australia's largest ever binding trade deals, a US$65 billion ($92 billion) iron ore sales contract, with its Chinese joint venture partner.

Gindalbie's offtake contract with Angang Group International Trade Corporation (Ansteel) is for life-of-mine production from their Karara magnetite project in Western Australia.

Perth-based Gindalbie says Karara has the potential to produce more than 30 million tonnes per annum for 30 years.

The first shipment to China under the new offtake agreement is expected to occur in the second half of 2011.

Gindalbie managing director Garret Dixon said Ansteel was paying full market price for the iron ore.

"For Ansteel, Karara becomes a strategic, long-term, cost-effective source of iron ore for their expanding steel-making facilities."

- AAP