African Minerals announced on March 6 that it intended to appoint administrators for the company after failing to negotiate a financial support agreement with Shandong Iron and Steel Group, its lender and partner in the Tonkolili iron ore mine in Sierra Leone. The company said it was working to identify an appropriate insolvency practitioner to represent and protect the interests of the creditors and stakeholders of the company.
Control of the operating companies that own and operate the Tonkolili iron ore mine and related infrastructure had passed to Shangdong Iron and Steel, and the future of the companies, and their ability to pay creditors, obtain funding, and restart operations, was entirely in the hands of Shangdong.
The Tonkolili mine produced 9.8 million mt of direct shipping ore during the six months to June 30, 2014, and was targeting full-year 2014 production of 16 million to 18 million mt before it was shut down and placed on care and maintenance in December 2014 due to an absence of sufficient working capital to maintain operations.
