Shandong Steel acquires 25 percent stake in African Minerals’ Tonkolili project

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.