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Shandong Iron & Steel Group To Invest In Iron Ore Project In Sierra Leone
= US$1.5 billion consideration to be paid upon receipt of Chinese regulatory approvals =
African Minerals Limited (African Minerals) announced on Aug 1 that it has signed final agreements with Shandong Iron & Steel Group Co., Ltd.(Shandong) of China. Shandong has agreed to acquire a 25% shareholding in the mine, rail and port and power subsidiaries comprising the Tonkolili iron ore project in Sierra Leone for a cash consideration of US$1.5 billion.

The agreements include certain discounted off-take arrangements in respect of iron ore produced at the Tonkolili Mine. Shandong will purchase 2Mtpa of Phase I production, an incremental 8Mtpa after Phase II is commissioned and 10Mtpa during Phase III, with discounts in each phase ranging from zero to 15%.

African Minerals will use the funds to accelerate the expansion and further development of the Tonkolili project and to repay the existing US$417 million Secured Loan Facility. The US$1.5 billion consideration will be paid upon closing, which is principally conditional upon receipt of relevant Chinese regulatory approvals. The parties have agreed a longstop date for closing of Dec 31, 2011.

Commenting on the announcement, Frank Timis, Executive Chairman of African Minerals said, "We are pleased to welcome Shandong, one of the world's largest steel producers, as a strategic investor in the Tonkolili project. Shandong's investment validates the scale and scope of the project and secures the funding which will enable us to accelerate the development of Phase II of our growth plans."
last modified : Mon 08 Aug, 2011 [11:16]
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