African Minerals Limited, the mineral exploration and development company with iron ore and base metal interests in Sierra Leone, has signed a binding memorandum of understanding with Shandong Iron & Steel Group (SISG) in respect of AML's flagship iron ore project at Tonkolili and the related infrastructure projects.
Under the deal, SISG will inject US$1.5B into the project. In return it will get a stake of about 25% of the Tonkolili project and access to up to 10 mtpa of iron ore at discounted prices.
The funding will enable AML to improve its implementation of Phase I and II of the project, including the introduction of an all-rail transport and logistics solution instead of the originally intended combined haul road and rail system, allowing uninterrupted year-round shipment, unaffected by the wet season.
Extension of the rail system is expected to be complete by Q3 2011, enabling delivery of first ore to Pepel Port in Q4 2011.
Commenting on the investment, Frank Timis, executive chairman of African Minerals said: "African Minerals welcomes the investment of SISG, one of the world's largest steel mills. When completed, this strategic investment will enable us to accelerate the development of Tonkolili."
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