African Minerals Limited load their first Tonkolili iron ore shipment in Sierra Leone
African Minerals Limited (AIM: AMI) today announced the successful commencement of loading of the first iron ore shipment from its Tonkolili project, the first such shipment from Sierra Leone in more than 30 years. The shipment of 40,000t of Direct Shipping Ore utilises a fully integrated mine, rail and port infrastructure built by AML within 14 months of receiving the Mining Lease and the Environmental Impact Assessment Licence.
- Tonkolili ore loading commences with opening of the fully integrated mine, rail and port facilities.
- First shipment to deliver 40,000t trial cargo to Shandong.
- Standard Bank $100m Standby Facility completed.
- Further Phase 1 expansion to 20Mtpa capacity initiated.
The shipment currently being loaded will be delivered to Shandong Iron and Steel Group (“Shandong”) and constitutes the trial cargo to be tested prior to the closing of their $1.5Bn investment, which remains on track for year end 2011.
Final commissioning of the port and rail will continue, and is expected to be complete by the end of Q4 2011. The Company’s contracted transhipment vessels have arrived at Pepel for AML’s exclusive use to allow the loading of Cape Sized vessels which will commence in November 2011.
Construction of the Tonkolili 15Mtpa wet process facility is progressing satisfactorily and is expected to be commissioned in Q1 2012, ramping up to full capacity during Q2 2012 as previously announced.
The Company is also pleased to announce the completion of the $100m Standard Bank subordinated standby facility. The agreement for this facility was executed yesterday and funds are now available for use at the company’s discretion subject to the terms of the facility.
Furthermore, the Company has now begun the construction of an additional 5Mtpa expansion, for the production of an “All in 32mm” (“AI32”) hematite product, with the additional mine and process capacity being commissioned in Q4 2011.
With this additional production capacity, our exports in 2012 are now scheduled to be 15Mt, which is within the company’s confirmed export capability.
In order to support the expanded infrastructure capacity beyond the current capacity of 16Mtpa, additional civil works and equipment, including additional passing loops, additional locos and ore cars, and a second wagon dumper at the port, are currently being designed and procured.
It is expected that the bulk of the costs of this additional infrastructure will be funded by vendor finance, with the balance funded from 2012 cashflow.
With a full year production from both the 15Mtpa wet plant and this additional 5Mtpa AI32 plant, annual Phase 1 direct shipping ore production from 2013 and beyond is now scheduled to be 20Mtpa.
Commenting on the achievement of First Ore on Ship, AML Executive Chairman, Frank Timis said
“We are delighted that our Phase I Tonkolili Project, with major expansion still to follow, has reached this important milestone which will see AML emerge as a world-class iron ore exporter.
This shipment represents the first iron ore to be mined and exported from Sierra Leone for almost 30 years, and will undoubtedly have a significant positive impact upon the people of Sierra Leone and the country’s economy.
With our planned near-term expansion to 20Mtpa in this, the first phase of development of our project, we will shortly become the largest fully integrated exporter of iron ore inWest Africa.”
Chief Executive Officer, Alan Watling, added
“I would like to congratulate the team for their tremendous efforts in successfully constructing the mine, rail and port project in just 14 months from the award of the mining licence, an achievement I believe to be unparalleled in the global mining industry.
We now look forwards towards the completion of the major wet process facility, and the exciting new additional expansion to 20Mtpa that is underway.”
AML Executive Chairman Sierra Leone, Gibril Bangura said
“The loading of our first shipment marks the beginning of an exciting era for both AML and Sierra Leone. The construction of the mine, rail and port is an outstanding achievement which has been made possible through the dedication of our team, including our contractors, together with a tremendous level of support from the people and Governments of Sierra Leone.”
Commenting on first export of iron ore from Sierra Leone in a generation, President Ernest Bai Koroma said
“The commencement of loading of this first iron ore shipment from Tonkolili is a significant milestone in Sierra Leone’s development as a major mining jurisdiction. Its achievement is further evidence that the redevelopment of Sierra Leone and its economy continues to progress. The strong relationship we have built with AML is testament to the long-term partnerships the Government of Sierra Leone is committed to building with responsible natural resource companies, and we will continue to work together to further help develop Tonkolili and to ensure that the country’s significant natural resource wealth is developed to the benefit of all Sierra Leoneans and investors alike.”
Contacts:African Minerals Limited +44 20 3435 7600 Mike Jones Aura Financial +44 20 7321 0000 Michael Oke / Andy Mills Deutsche Bank +44 207 545 8000 Rupert Green
African Minerals is developing its Tonkolili iron ore project inSierra Leone, with a JORC compliant resource of 12.8Bnt. The project, which currently has a 60+ year mine-life, is being developed in 3 phases. Phase I is expected to produce 20 million tonnes of iron ore per annum at full capacity.
Phase II now contemplates a 30Mtpa expansion, taking production to 50Mtpa, and the establishment of an expanded port facility at Tagrin Point, a new standard gauge, heavy haul railway from Tonkolili to Tagrin Point, and an expanded production facility at the mine to produce a 64% high grade hematite concentrate.
African Minerals and its contractors currently employ approximately 7,300 people in Sierra Leone, 85% of whom are Sierra Leonean nationals.
The Company has developed significant port and rail infrastructure to support the operation of the project, via its subsidiary African Rail and Port Services (SL) Limited (“ARPS”), in which the Government of Sierra Leone has a 10% free carried interest. With the exception of this interest, the Tonkolili project companies are currently owned 100% by AML.
The Company has also executed a definitive agreement with Shandong Iron and Steel Group (“Shandong”) whereby Shandong will invest $1.5Bn at the project level to acquire a 25% interest in the project companies, with associated discounted product offtake. The investment is subject to Chinese regulatory approvals, expected by the end of the year.
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