China puts $6bn valuation on 20mtpa Sierra Leone iron ore mine
Shares of African Minerals (LON:AMI) surged 47% in heavy volumes on Thursday after announcing one of China's largest iron-ore trading companies will inject $990 million cash into the London-listed company's Sierra Leone mine.
African Minerals said Tianjin Minerals and Equipment Group (Tewoo) will receive a 16.5% stake in its Tonkolili deposit which values the project at $6 billion.
Tonkolili is a massive 12.8 billion tonne magnetite deposit which entered production in the final quarter of 2011 with production of 20 million tonnes per year.
Cash costs at the project in the centre of the West African country is pegged at just $30 a tonne.
Last year African Minerals, worth $1.2 billion on the LSE after today's surge in value, also secured a $1.5 billion investment from Shandong Iron & Steel Group.
China forges almost as much steel as the rest of the world combined and this year is on course to produce a record-breaking 770 million tonnes. The country consumes more than 60% of the world's 1.1 billion tonnes seaborne iron ore.
The benchmark CFR import price of 62% iron ore fines at China's Tianjin on Thursday was $133.80 a tonne, up 27% up from levels reached this time last year according to data provided by SteelIndex.