Chinese steel producer Shandong Steel Corporation has lately completed the acquisition of a 25 percent stake in the
Sierra Leone-based Tonkolili
iron ore project which is owned by London-listed
Africa-focused
mining giant African Minerals Ltd.
Shandong Steel has paid $1.5 billion in total for the deal. In addition to the shares, it has also obtained the option to purchase 25 percent of
iron ore produced by the project as well as obtaining up to 15 percent discounts if its annual purchased tonnages exceed a certain level. However, the deal is still subject to the approval of the Chinese government.
African Minerals said it will invest the proceeds of the deal to expand the Tonkolili project, which is the world's largest magnetite
iron ore mine with total
iron ore reserves of 12.8 billion mt. The project is scheduled to be carried out in three stages. All of the
iron ore produced by the project will be supplied to the Chinese market. The first shipment of
iron ore is expected to be delivered to
China in the fourth quarter of this year.