African Minerals Ltd announced that it had agreed to sell the 17% stake it holds in its Tonkolili iron-ore mine in Sierra Leone to Tianjin Materials & Equipment Group Corp. The Chinese firm would be paying USD 990 million for the mine. Boards of both firms already approved the deal.
The sale would enable African Minerals to boost its capital after it missed sales forecasts. In a filing Chairman Frank Timis said, "This transaction will provide African Minerals with almost a billion dollars of additional funds at the corporate level, significantly strengthening our balance sheet, and will provide flexibility in financing options for the company's future development."
Investors also welcomed the sale as shares in African Minerals went up in London Trading after news about the investment became public. The mining firm's 57% increase was its biggest gain after more than four years. It was also the largest rise among the firms that traded on the FTSE AIM All-Share Index.
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