Chalco, the nation's largest aluminum producer, on Jul 29 may sign a JV agreement with Rio Tinto to develop the Simandou iron ore reserve in Guinea, two sources familiar with the matter said.

Both A shares and H shares of Aluminum Corp of China Ltd, or Chalco, has been suspended from trading from Jul 27 on a possible joint venture deal with Rio Tinto on the Simandou project in Africa.

Rio Tinto announced March this year that it inked a memorandum of understanding with state-owned Chalco on the establishment of the JV for the large iron ore project.

Pursuant to the MOU, the Chinese company will acquire a 47% stake in the JV by providing US$1.35 billion during the next two to three years.

Simandou project is a huge iron ore project in southeastern Guinea, it has 5 billion tons of iron ore reserves.