“The three names dominating about 75% of global  seaborne iron ore, Vale, Rio Tinto, and BHP Billiton, are full force involved in West African iron ore.”
London-listed African Minerals has announced further significant Chinese investment in its Tonkolili, Sierra Leone, iron ore project, now by Shandon g Iron & Steel, which plans to put USD 1.5bn into mine and infrastructure development. This will gain the State-owned Chinese steelmaker a 25% equity stake in Tonkolili, and an offtake of 10m tons a year of seaborne iron ore, at discounted rates.
The latest deal in West African iron ore, which has captured billions of dollars of mining investment in the past few months, once again illustrates China’s long term commitment to financing resources in specified minerals and commodities.
At the same time, the deals show that not even the world’s biggest mining companies have sufficient individual resources to cover all the risks in these investments. Even the capital required for a new world class iron ore mine seems to be beyond the biggest individual miners. By iron ore standards, African Minerals is a minnow, and needed partners from day one. On 6 January African Minerals announced a deal with China Railway Materials Comme rcial Corporation (CRM); overall, African Minerals/Tonkolili have now agreed to sell up to 35m tonnes of iron ore a year, to CRM and Shandong Iron and Steel. But it will take years before this level of output is possible, and many more billions of dollars worth of investment. Tonkolili may have dreams of one day producing 70m tonnes a year of iron ore, but by that stage, capital investment would likely be approaching the USD 10bn mark. African Minerals currently holds a market value of USD 1.8bn.
Read more at http://www.mineweb.co.za/mineweb/view/mineweb/en/page39?oid=107886&sn=Detail&pid=102055.