PERTH, Australia (AP) -- Australian miner Gindalbie Metals Ltd. on Tuesday announced an iron ore sales contract potentially worth more than $65 billion over three decades with China's second-largest steelmaker.
The contract with a unit of Angang Group covers the output of the new Karara mine in the state of Western Australia, developed by the two companies as equal partners, Gindalbie said. Construction began last year and the first ore is expected to reach China next year.
Gindalbie said Karara has the potential to produce more than 33 million tons (30 million metric tons) of ore per year for 30 years, which could be worth more than $65 billion.
The deal is the latest in a series of resource investments by Chinese metals and energy companies in Australia and elsewhere to secure supplies of raw materials and in hopes of profiting from future demand. China is the world's biggest steel producer and is the top market for Australia's iron ore producers.
Angang Group, also known as Ansteel, owns 36 percent of Gindalbie's ordinary shares.
Gindalbie managing director Garret Dixon said Angang would pay full market price for the iron ore.
"For Ansteel, Karara becomes a strategic, long term, cost-effective source of iron ore for their expanding steelmaking facilities," Dixon said in a statement.
Gindalbie shares rose 7 percent to 1.19 Australian dollars (US$1.09) on the Australian market Tuesday.