London, England — MININGREVIEW.COM — 19 February 2010 – Iron ore explorer African Minerals “’ a mineral exploration and development company with significant iron ore and base metal interests in Sierra Leone “’ has verified the size of its Tonkolili project in the country at 10.5 billion tonnes of magnetite, which is the biggest deposit in the world.
Resources-hungry China will be a key customer of the Sierra Leone mine project which is expected to produce about 45 million tonnes of iron ore a year when at full capacity in 2014.
African Minerals expects to finalise a deal next month for China Railway Materials Commercial Corporation to buy a 12.5% stake for US$239.4 million (R1.8 billion) to fund the first stage of the Tonkolili project. Commercial production is expected to start in the first quarter of 2011.
African Minerals also raised R1 billion in a share placement last month so that it could start construction of the project. CRM “’ one of China’s largest steel trading companies “’ agreed to buy the stake at 500 pence a share, and to be supplied with about 18 to 20 million tonnes of iron ore annually under 20-year contracts.
“Negotiations with CRM in respect of the planned investment are progressing well,” African Minerals said.