The scramble for west Africa's iron supplies gained pace yesterday when a Chinese steel mill agreed to pay $1.5bn for a minority interest in a nascent iron ore project in Sierra Leone.
The deal highlights China's willingness to stump up cash to secure resources, even in politically risky regions, to diversify from dominant suppliers in Australia and Brazil.
Shandong Iron and Steel Group, one of China's largest state-owned mills, has agreed to pay African Minerals $800m followed by two other cash payments, totalling $1.5bn. The proceeds will help build African Minerals' flagship mine at Tonkolili, a rich iron ore deposit in Sierra Leone, as well as the rail and port infrastructure. In return, Shandong Steel would gain a 25 per cent stake in both the Tonkolili mine and two other related African Minerals subsidiaries.