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African Minerals scraps plan for new port

18 December 2012, 14:36

Freetown - African Minerals Ltd will expand its existing rail and port infrastructure rather than build a new port to serve its flagship iron ore mine in Sierra Leone, a move, the company said, will save it about $1 billion.

African Minerals, which is dealing with a short-term funding crunch, said it expects total capital expenditure on the revised expansion plan to be about $2 billion.

"This will significantly reduce capital costs, and de-risk the project's delivery, whilst at the same time reducing social and environmental impacts," African Minerals said.

The company on Monday cut its iron ore shipment forecast from the Tonkolili mine, which sits on one of Africa's largest iron ore deposits, and said it was in advanced talks to secure additional working capital requirements.

African Minerals has cut its production forecast twice this year as shipping was suspended between August and October due to high moisture levels after unusually heavy rains.

The miner also agreed to raise China Railway Material Group Co Ltd's ownership limit in the company to 15 percent from 12.5 percent.

Shares in African Minerals rose as much as 7 percent to an intra-day high of 292 pence on the London Stock Exchange on Tuesday. They were up 6 percent at 289.75 pence at 1022 GMT.

- Reuters

Tags minerals

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