In accordance with terms of a recent memorandum of understanding, African Minerals Ltd., with significant mining and exploration interests in Sierra Leone, and the government of Sierra Leone have entered into exclusive leases and operating agreements.
This information has been confirmed by RNS, the company news service from the London Stock Exchange.
Under a Bumbuna Hydro-Electric Scheme the MOU provides that in co-operation with the Bumbuna Power Authority and government, and concurrently with preparation of the Tonkolili feasibility study, the Company will commission an engineering study on the Bumbuna hydro-electric power source.
The Bumbuna hydro-electric power source is located approximately 20 kilometres from the Tonkolili project.
As well as providing additional power generation capacity for national requirements, the aim of this study will also be the upgrading of the generating capacity of the Power Source and the construction of power transmission facilities to enable the Company's Tonkolili iron ore operations to benefit from access to a secure and uninterrupted power supply.
Commenting on the MoU, Mr Frank Timis, Executive Chairman of the Company said: "We are delighted to be embarking on the next phase of our strategic plan to become a diversified minerals producer. The MoU underlines the Company's strong working relationship with the Government of Sierra Leone and commitment to improving the country's infrastructure whilst securing the rail, port and power capacity requirements for our iron ore projects. Exploration results to date suggest that the Tonkolili project has the potential to be a world class iron ore deposit. We welcome the continued support of the government in helping us to realise that potential, bringing positive benefits to the economy and improving the standard of living for the people of Sierra Leone." Meanwhile, the Company will undertake an engineering study to upgrade the deep water port at Pepel ("the Port") assuming a handling capacity of up to 25 million tonnes per annum to meet import and export requirements, including those of third parties.
Subject to the results of the study the Company will upgrade the Port, which it will then maintain and operate on a commercial basis; Having identified a need for enhanced carrying capacity and improved transport services in general, the Company will engage engineering consultants to complete a study examining the feasibility of upgrading the existing railway between the Port and Marampa ("the Railway") from narrow gauge to standard gauge. Subject to the results of the study the Company will upgrade the Railway, which it will then maintain and operate on a commercial basis; The Port and the Railway would be made available at commercial rates to other users including mining companies and general cargo and passenger transporters; Subsequent to receipt of satisfactory engineering and feasibility studies, the Company will construct and manage an extension of the Railway to the Company's flagship iron ore project at Tonkolili, enabling the Company efficiently and cost effectively to transport its iron ore production to the Port for export to international markets.