HONG KONG and LONDON, April 22, 2015 /PRNewswire/ --
Shandong Iron and Steel announces that it has acquired the 75 per cent stake in the Tonkolili Iron Ore mine in Sierra Leone it does not already own.
Following the acquisition of the stake previously owned by African Minerals (AML), Shandong now owns 100 per cent of the equity of Tonkolili as well as the associated infrastructure company African Port and Railway Services. Shandong now intends to take appropriate steps to return the mine to full production and to protect the assets against the imminent wet season. The mine has been on care and maintenance since November 2014.
The acquisition follows a worldwide sale process run by the security agent, Madison Pacific Trust, assisted by PricewaterhouseCoopers. The sale was prompted by AML's inability to meet the Project's further financing needs and was undertaken in a time frame which reflected the Government of Sierra Leone's anxiety to see a satisfactory resolution of the Project's difficulties by mid-April. Whilst a number of parties expressed interest in the sale process, Shandong was the only party willing and able to take over the AML stake and to provide the support and assistance necessary to return the Tonkolili Iron Ore mine to production.
Shandong has invested more than $1.67 billion in Tonkolili over the past five years, including over $170 million in connection with the recent acquisition of the AML stake, and will provide further funding as required including $600m to progress Phase 2 of the Tonkolili Project, which will see production lifted to 25mtpa.
Shandong will now work with the Government of Sierra Leone, the Project's employees and all other stakeholders in Sierra Leone to ensure this high-quality long life asset, which is of key economic benefit to the people of Sierra Leone and provides employment to many, returns to production in a timely manner.
Notes to Editors:
AboutTonkolili Iron Ore Project:
Tonkolili is situated 200km north east of Freetown, the capital of Sierra Leone and is a fully integrated iron ore mine with 13.6bn tonnes of resource. It is the second largest iron ore mine in Africa and one of the largest magnetite deposits globally, with a mine life estimated in excess of 60 years.
Phase one capacity of 20mmtpa has been achieved with plans in place for expansion to 25mmtpa. Ore is transported from site via a single track rail system to the company's own deep water port in Freetown where it is shipped globally to customers.
About Shandong Iron and Steel Group:
Shandong Iron and Steel Group Co Ltd ('SISG') is a Chinese steel company based in Jinan, China. SISG is controlled by the provincial government of Shandong. SISG was formed in March 2008 through the restructuring of Jinan Iron and Steel Group Co, Laiwu Steel Group Corp and Shandong Metallurgical Industry Corp by the provincial government of Shandong. Over 2014, SISG produced 23.3 million tonnes of steel, 23.4 millions of tonnes of iron ore, and 22.6 millions of tonnes of steel products.
About Madison Pacific Trust:
Madison Pacific is a premier independent provider of an extensive range of trustee and escrow agency, custodial, directorship and company secretarial services in a wide variety of investment contexts and special situations, such as restructurings, distressed transactions, complex workouts and private investment throughout Asia Pacific, as well as investing and asset management. Madison Pacific has considerable experience with complex M&A and cross-border deals. Madison Pacific has offices in Hong Kong, Singapore and Beijing.
For further information:
Brunswick London: +44(0)20-7404-5959
Carole Cable
David Litterick
Brunswick Hong Kong: +852-3512-5000
Tong Zhao
Yin Ai
