“The Tonkolili mine is considered to have access to some of the largest iron-ore resources in Africa”, the BMI Research findings stated.
The emerging trend seemingly bodes well in certain respects for Sierra Leone, with BMI’s view that China’s provision of additional domestic infrastructure stimulus measures have propped up prices, contributing to a “very positive” past year for iron-ore.
“The mine’s current production capacity is 20-million tonnes a year and it was initially planned that the mine would eventually produce up to 35-million tonnes of iron-ore a year. All of the iron-ore mined at Tonkolili will be shipped to China, according to Shandong Iron and Steel,” BMI Research explained.
“The total contribution of Sierra Leone’s mining industry as a percentage of gross domestic product is no longer as significant as it once was and will continue to decrease in the coming years, even as GDP growth increases,” the firm added.
Shandong acquired the remaining 75% stake it did not own from African Minerals which went into administration in 2015 after the Ebola crisis halted operations and left the former owner in debt.
“This follows a growing trend of Western miners pulling out of the region owing to rising costs and debt loads [and] being replaced by risk-tolerant, government-backed Chinese investors,” BMI said.