African Minerals drops plan for new port in order to save USD 1bn.

By bne IntelliNews December 19, 2012
Sierra Leone-focused minerals exploration and development company African Minerals has reviewed its expansion options and now plans to expand its existing rail and port infrastructure at Pepel rather than develop a new port at Tagrin Point to serve its flagship Tonkolili iron ore mine in a bid to save some USD 1bn, the company said in a statement. African Minerals expects total capital expenditure on the revised expansion plan to be about USD 2bn. This will significantly reduce capital costs, and de-risk the project's delivery, whilst at the same time reducing social and environmental impacts," the companys CEO Keith Calder said in the statement. The 12.8 billion tonnes Tonkolili project has one of Africa's largest iron ore deposits. AIM-listed African Minerals is thus the largest employer in Sierra Leone and is set to become the largest contributor to the West African country's gross domestic product (GDP). The Tonkolili project, which currently has a 60+ year mine-life, is being developed in a number of staged expansions. The current operations are expected to produce 20 million tonnes of iron ore per year at full capacity, expected to be achieved in Q2 2013. The next stage of expansion now contemplates the production of up to 35Mtpa (million tonnes per year) of 64% high grade hematite concentrate and the expansion of the current port facilities at Pepel, expected to enter production in 2016. Subsequently the project is expected to grow into the multi-generational magnetite resource.

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