"This is a landmark, high integrity agreement with a top three steel group in China and is a company-maker for us in every sense," Centrex chairman David Lindh said in a statement.

Wuhan will also pay an additional 9.7 million dollars for a direct 15 percent stake in Centrex and will work with the miner on its plans for the development of a new deep water export port.

The move follows a steady stream of Chinese investment in Australia's iron ore sector and analysts said it showed Chinese steelmakers were looking beyond the current downturn and acting to lock in future sources of supply.

"The deal indicates that Chinese steel mills are still willing to do deals and have a long term view on the sector and are still looking to secure offtake," Andrew Muir, an analyst at financial group Hartleys, said in a client note.

Wuhan will make an initial cash payment of 59.5 million dollars once all government consents and permits have been received, which Centrex said is expected in March, followed by another 30 million payment 12 months later.

A further 90 million will be paid in four tranches as the joint venture partners achieve targeted iron ore resources rising to two billion tonnes.

- Dow Jones Newswires contributed to this report -

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