Rio Tinto Ltd. (RTP) said Tuesday it struck a deal that will see it buy product from the Phil's Creek project of Iron Ore Holdings Ltd. (IOH.AU) in Western Australia and then transport it to the coast for export.

The mining giant has been fighting a long-running legal battle to prevent other miners being granted access to its iron ore railways, and sees the "mine-gate" sales to IOH as an innovative alternative.

"This is a significant development for Rio Tinto, IOH and the Pilbara generally," Rio Tinto Iron Ore Chief Executive Sam Walsh said in a statement.

"It is a prime example of how a major established producer and a small, progressive junior can work together to achieve an excellent outcome for all stakeholders."

The deal will see IOH deliver up to 1.5 million metric tons of ore a year to Rio Tinto, which will then transport it to the coast for export at its port.

Rio said it also entered into an exclusive agreement with IOH to examine its Iron Valley deposit ahead of a possible purchase of part or all of the lease covering the deposit.

-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094; alex.wilson@dowjones.com
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