Thursday, 12 May 2011
African Minerals has expressed renewed hopes for a revised arrangement with Chinese steel company Shandong Iron & Steel Group following a recent proposed USD 1.5 billion investment in the flagship Tonkolili iron ore project and related infrastructure.
According to regulatory news service on the London Stock market in the UK, the legally binding and exclusive MoU, which requires final contractual documentation to be prepared, supersedes all previous agreements with Shandong and reflects the considerable progress made at the company since discussions between AML and SISG began in July 2010.
The consideration, expected to be paid in full on closing and payable either in cash or by demand bank guarantee would accelerate the development of the mine operation at Tonkolili and for construction of the related infrastructure in Sierra Leone.
Mr Frank Timis executive chairman of African Minerals said that “We are delighted to have further developed our relationship towards a formal partnership with one of the world’s largest steel mills. Upon completion, Shandong’s proposed strategic investment would provide us with the financial strength to accelerate the development of the Tonkolili Project and the agreement also provides a buyer for a significant proportion of our iron ore product.”
“The investment by Shandong would give us the ability to pay down the current debt, and to commit to our Phase II expansion at an earlier stage thereby providing significant benefits to the Company, its shareholders, SISG, and the Government and People of Sierra Leone. Meanwhile, further progress has been made by SISG towards completing its due diligence, and this process is substantially complete. The exclusivity period with SISG runs to the end of May 2011 and the parties are working to finalize the agreements by that time.”
African Minerals is developing the wholly owned Tonkolili iron ore project in Sierra Leone, with a JORC compliant resource of 12.8 billion tonnes. The project, which currently has a 60+ year mine-life, is being developed in 3 phases. Phase I of the project is fully funded and at full capacity is expected to produce 12 million tonnes of iron ore per annum once it ramps up from initial production in the last quarter of 2011. Phases II and III are expected to boost production incrementally by 23 million tonnes per annum (Mtpa) and 45Mtpa respectively. African Minerals and its contractors currently employ approximately 3,600 people in Sierra Leone, 78% of whom are Sierra Leonean nationals. Stay with Sierra Express Media, for your trusted place in news!
(sourced sierraexpressmedia)
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