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News >Bizchina

Sierra Leone welcomes Chinese steel mill's investment

2010-07-17 11:58

FREETOWN, Sierra Leone - Sierra Leone Mineral Resources Minister Alpha Kanu on Friday welcomed a $1.5-billion investment in a major iron ore mine in the country, saying that it will boost the local economy and create thousands of jobs.

The Shandong Iron and Steel Group Co, Ltd of China has signed a binding Memorandum of Understanding with the London-listed African Minerals to acquire a 25-percent share of African Minerals' Tonkolili iron ore mine in Sierra Leone at the cost of $1.5 billion, African Minerals announced on Tuesday.

"It is a great mining achievement for Sierra Leone, as it will bring much needed foreign exchange to boost up the fragile Sierra Leone economy," Kanu said.

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"We are also delighted that some 2000 Sierra Leonean youths will be employed, which will be increased to between 4,000-5,000 jobs in the future," he added.

The investment came with an off-take agreement for a total of up to 10 million tons of iron ore at discounted prices each year.

African Minerals said the proceeds from the deal will be used to build a railway line linking the mine and the port. The railway will be completed in the fall of 2011, and the first delivery of iron ore will take place in the fourth quarter of the same year.

Shandong Iron and Steel Group is one of the largest steel enterprises in China while African Minerals is Sierra Leone's biggest exploration and mining company.

Earlier, African Minerals signed an agreement with China Railway Materials Commercial Corporation, allowing the state-owned Chinese enterprise to take 12.5 percent of its stakes.

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