SYDNEY - [AAP] Rio Tinto (ASX: RIO) has again extended an agreement to sell its Pilbara iron ore to Chinese state-owned steel company Sinosteel.

The two businesses will sign a new deal to extend their Channar Mining joint venture in WA, under which Rio will supply an additional 10 million tonnes of iron ore in return for an upfront payment of $US15 million ($A19.7 million) as well as production royalties linked to the iron ore price.

This is the third extension for the joint venture, which was first formed in 1987 for the joint development of the Channar mine in the Pilbara and is 60 per cent owned by Rio and 40 per cent by Sinosteel.

The mine is managed by Rio Tinto and the JV agreement provides off-take rights to Sinosteel for volumes equal to the Channar production.

The two companies in 2016 signed agreements for Rio to supply iron ore to the Chinese steelmaker until 2021.

The joint venture has so far delivered around 250 million tonnes of iron ore and the current agreement will take production over the life of the asset to 290 million tonnes, Rio said.

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