Chinese firm buys African mine stake

Tianjin Materials & Equipment is buying a stake in Sierra Leone's largest iron ore mine for US$990 million.

African Minerals, the biggest producer of the steelmaking ingredient in Sierra Leone, said it had agreed to sell 17 per cent of its Tonkolili mine to Chinese commodities importer Tewoo.

The deal boosts financing at the miner, which had shelved a US$2.5 billion expansion after missing sales forecasts.

For China, the world's biggest steelmaker, it increases access to iron ore to feed growth in construction and cars.

"This transaction will provide African Minerals with additional funds at the corporate level, significantly strengthening our balance sheet, and will provide flexibility in financing options for the company's future development," chairman Frank Timis said.

Tianjin Materials' offer values Tonkolili at US$6 billion. The deal, approved by the boards of both companies, will be accompanied by a 20-year offtake agreement for 10 million tonnes of ore.