Chinese approve $1.5bn investment in African Minerals project

African Minerals (AMI), the iron ore producer focused on Sierra Leone, says its Chinese partner has been given state approval for a $1.5bn investment in the huge Tonkolili project.

The Shandong Iron and Steel Group has also confirmed that testing of a trial shipment has been successful and that Tonkolili iron ore is of sufficient quality to satisfy the conditions of the agreement between the two companies.

African Minerals says further approvals from the Chinese government are "expected shortly" but the firms are having to extend the long stop date for the transaction until the end of March.

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Frank Timis, the Chairman of African Minerals, said the approval, and the success of the trial shipment, "represent major progress".

Shares in AMI were up 5.4% by 11am. Over the last year the stock has lost 1.24%.

The plan now is to ramp up production to the rate of 20 million tonnes per year by the end of 2012.

The resource estimate for Tonkolili is 12.8bn tonnes, or a mine life of 60 plus years.

BS