On September 23, African Minerals Limited (AML), a Channel Islands-based iron ore miner with significant iron ore and base metal interests in Sierra Leone, announced that Chinese steelmaker Shandong Iron & Steel Group Co Limited (Shandong) and AML have amended and restated the terms of their memorandum of understanding originally signed in July 2010.
The memorandum is in respect of Shandong's planned investment of US$1.5 billion in AML's flagship iron ore project at Tonkolili, located in the Northern Province of Sierra Leone, and the related infrastructure projects.
The MoU continues to envisage Shandong purchasing a 25 percent interest in each of AML's wholly-owned Bermuda subsidiaries of Tonkolili Iron Ore Limited, African Railway & Port Services Limited and African Power Limited.
The revised target date for signing the subscription agreement and the off-take agreement is now November 20, 2010, subject to planned completion of due diligence on October 20 and agreement of final documentation between the parties.
Subject to AML board approval, exclusivity is granted by each of the subsidiaries to Shandong until October 20, 2010.
Subject to approval of the proposed timetable by the relevant China regulatory authorities, (i) all approvals required by Shandong to make the investment are to be received, and all other conditions required under Steps 1, 2 and 3 of the subscription agreement are to be satisfied, by December 31, 2010; and (ii) payment of US$800 million under step 1 of the subscription agreement is to be received by AML by January 21, 2011.