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Second Chinese investor for Tonkolili project

At work on the
Tonkolili project
London, England — MININGREVIEW.COM — 13 July 2010 – AIM-listed mineral exploration and development company African Minerals Limited has sealed a second investment deal with a Chinese industrial group for its flagship iron ore project in Sierra Leone.

Announcing this in a statement released here, the company revealed that it was selling a 25% stake in the project to Shandong Iron & Steel for US$1.5 billion (R11.25 billion).

In January, African Minerals concluded a £153 million (R1.8 billion) deal with the China Railway Materials Commercial Corporation “’ one of the country’s largest steel trading companies “’ to help fund the first stage of the Tonkolili project.

News of the latest deal “’ which involves a three-stage investment and an agreement for Shandong to buy 10Mtpa of iron ore at discounted prices “’ sent shares soaring 19.5% by 0714 GMT this morning.

“When completed, this strategic investment will enable us to accelerate the development of Tonkolili,” executive chairman Frank Timis said in a statement.

The investment will allow the firm to boost production from the first phase of the project to 10 Mtpa from 8Mtpa, the statement said. It will also speed up the launch of the second phase to the fourth quarter of 2012.

The statement added that the new funds would allow an improvement in the planned infrastructure so that all transport would be on rail, instead of a mix with road haulage.“This means that there will be uninterrupted year-round shipment, unaffected by the wet season,” the company explained.