Sierra Leone: Iron ore mine in sale to survive

AFRICAN Minerals will seek to sell part of its stake in the Tonkolili iron ore mine in Sierra Leone in what analysts say is a last-ditch effort to stay afloat, after it failed to secure the release of funds held by its Chinese partner. The Sierra Leone-focused miner, which owns a 75 percent stake in Tonkolili, said on Thursday that it was considering the sale after it was unable to reach an agreement with Shandong Iron and Steel. The Chinese group bought 25 percent of Tonkolili in 2011 in a $1.5 billion (R16.4bn) deal. Standard Chartered advised the miner separately that it would not be able to structure a new debt deal. African Minerals is burdened by $790 million in gross debt. All the while, it is burning cash at Tonkolili, struggling with a 48 percent drop in the iron ore price and higher costs due to the Ebola epidemic. Its shares have lost 95 percent of their value this year making its market capitalisation about $52m. “This reads a lot like death-throe convulsions for African Minerals,” Investec analysts said. African Minerals shares were suspended on Thursday, pending funding news. – Reuters