The two companies will jointly develop the vast Simandou iron ore mine in the African nation of Guinea.
The Chinese metals group will pay $1.3bn (£0.85bn) for 47 per cent of the project. Under the terms of the deal, Chinalco would invest $1.35bn for the stake from Rio, which owns 95 per cent of the project.
The agreement comes at a time of strained relations between Canberra and Beijing due to the trial of four Rio executives in China. The men are due to appear in a Shanghai court on charges of receiving bribes and spying on China during pricing talks last year.
The Simandou mine is one of the world's largest undeveloped iron ore deposits, containing an estimated 2.5 billion tonnes of high-quality iron ore. The project will cost about $6bn.
Rio chief executive Tom Albanese said the project, which involves building rail and port infrastructure, would create tens of thousands of jobs in Guinea.
