Project ID: 30068

CDB provides $1.2 billion loan to SISG to facilitate acquisition of 25% ownership stake in Tonkolili Iron Mine (Linked to Project ID#67499, ID#67503, and ID#92212)

Commitment amount

$ 1408948269.511014

Adjusted commitment amount

$ 1408948269.51

Constant 2021 USD


Funding agency [Type]

China Development Bank (CDB) [State-owned Policy Bank]


Sierra Leone


Industry, mining, construction (Code: 320)

Flow type


Level of public liability






Commercial (The next section lists the possible statuses.)





Financial Flow Classification

OOF-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle


Completion (The next section lists the possible statuses.)










Actual start


Actual complete



On July 13, 2010, African Minerals Ltd. (AML) announced that it had signed a strategic, binding Memorandum of Understanding (MOU) with Shandong Iron and Steel Group (SISG) — a company controlled by the Shandong Provincial Government — regarding a $1.5 billion investment in the Tonkolili iron mine in Sierra Leone. It was envisaged that the project would involve a fully integrated mine with rail and port infrastructure, and it would be developed in three phases (stages). Phase 1, which was underpinned by a $1.7 billion EPC contract between AML and China Communications Construction Company, Ltd. (signed on December 7, 2011), involved the complete rehabilitation and expansion of the port in the town of Pepel (within Kamasondo Chiefdom and Port Loko District), as well as the reconstruction of 74 km of pre-existing railway and the completion of a new 126 km narrow-gauge railroad (running from New Tonkolili Iron Ore Mines to the port town of Pepel), and the establishment of a major mine at Tonkolili (in the Sula mountains, in the east of the country). Phase 2 was expected to involve the expansion of about 30-million-tons a year which will take the mine’s production to about 50-million tons a year. It was also expected to involve the establishment of a new deep-water port facility at Tagrin Point, an extension of the narrow-gauge rail from the existing route to Tagrin Point, and an expanded production facility at the mine to produce a 64% high-grade hematite concentrate. Phase 3’s scope is unknown. In August 2010, a mining lease for the project was approved. The project’s design and implementation was initially overseen by Tonkolili Iron Ore (TIO), a subsidiary of AML. Phase 1 of project development commenced and iron ore production began in November 2011. Then, in 2012, China Development Bank (CDB) issued a $1.2 billion loan to Shandong Steel Hong Kong Resources (a subsidiary of SISG) to facilitate its acquisition of three subsidiaries — Tonkolili Iron Ore, African Railway & Port Services and African Power — from AML (captured via Project ID#30068). Shandong Steel Hong Kong Resources used the proceeds from this loan to facilitate the acquisition of a 25% ownership stake in the Tonkolili iron ore mine and and related power infrastructure projects in Sierra Leone. On March 29, 2012, SISG successfully purchased a 25% ownership stake in the Tonkolili iron mine and related power infrastructure projects from AML for $1.5 billion. More specifically, it purchased 25% ownership stake in three project companies — TIO SL, ARPS SL and African Power (SL) Limited — that were previously majority-owned by AML. AML said at the time that it would use the capital infusion from SISG to construct a railway line linking Tonkolili mine and the coast (see Project ID#20210). In 2013 and 2014, AML’s financial performance was adversely affected by a reduction in iron ore prices and an Ebola outbreak in Sierra Leone. In light of these and other issues, and AML’s need to service its debt, including a pre-export finance (PXF) facility with Standard Bank of South Africa Limited (SBSA) and Standard Bank plc (SB), discussions began in the summer of 2014 between AML and Shandong Steel Hong Kong Resources (SSHR), over the timing of the release of a $284 million loan disbursement from CDB. In August 2014, both parties agreed to authorize the release of all funds to meet the liquidity needs of the project. By the beginning of November 2014, $182 million had been released by CDB to fund AML’s working capital needs, but SSHR’s cooperation to effect the previously agreed release of the balance of $102 million was not forthcoming. Then, in December 2014, AML announced that due to insufficient working capital, the Tonkolili iron mine was being temporarily closed (山钢集团在塞拉利昂百亿投资遇挫). During December 2014 and early January 2015, negotiations took place between AML and SSHR, with the involvement of the Government of Sierra Leone, over the sale of part of AML’s equity stake in the Tonkolili iron mine project to SSHR (or another subsidiary of SISG). An MOU between the parties was developed and initialed for identification only, though never signed. By early February 2015, SSHR had agreed the release of a further $19.7 million from CDB accounts, but there was no further engagement on the acquisition of AML’s equity stake in the Tonkolili iron mine project. The cash was applied to the payment of December and January salaries and taxes due in Sierra Leone, and some other essential payments to fund the care and maintenance of the asset. The remaining balance of funds within the CDB accounts was $82.4 million. Given SSHR’s refusal to permit the funding in the CDB accounts to be released, AML was unable to service the PXF Facility and defaulted on payments due under the PXF Facility in late November 2014, December 2014, and January 2015, in an aggregate amount of $31,249,999. AML then entered into negotiations with the PXF Facility lenders with respect to a potential sales process. While these discussions with the PXF facility lenders were continuing, on February 27, 2015, AML was notified that Shandong Steel Hong Kong Zengli Limited (SSHK), a subsidiary of SISG, had acquired all of the rights and obligations of all the existing lenders under the PXF Facility. On the same day, Standard Advisory London Limited, as agent, served a notice of acceleration on the borrowers of the PXF Facility of all amounts due and payable under the PXF Facility on the basis of the failure to make scheduled repayments of principal of the PXF Facility, and demanded the guarantee against the Company. Also, on February 27, 2015, the borrowers of the PXF Facility were given 31 days’ notice of the resignation of (i) Standard Advisory London Limited as agent and (ii) SB as security agent. On March 4, 2015, Madison Pacific Trust Limited (Madison Pacific), a Hong Kong incorporated trustee services company, informed AML that it had been appointed as agent to the then security agent to conduct a sale process in relation to the Charged Shares. On March 31, 2015, Madison Pacific was appointed as replacement facility agent and security agent under the PXF Facility and continued to conduct the sales process in respect of the Charged Shares. By an application presented to the Chancery Division of the High Court on March 26, 2015, AML applied for an administration order on the basis that it was cash-flow and balance sheet insolvent, and that its center of main interest was in England. AML thereby submitted to the jurisdiction of the courts of England and Wales. Mr. Ian Colin Wormleighton and Mr. Neville Barry Kahn of Deloitte LLP were appointed as the joint administrators of AML by the order of Mr. Kevin Prosser QC (sitting as a deputy judge of the Chancery Division of the High Court) on March 26, 2015 (the “Administration Order”). Immediately following their appointment, the Joint Administrators sought to protect and preserve the assets of AML, including engaging with SSHK and SISG and Madison Pacific regarding the enforcement action and seeking orders from both the UK and HK courts. The Joint Administrators instructed Akin Gump LLP to advise on relevant matters arising during the administration, including advice on the enforcement action taken by Shandong. At the date of the Joint Administrators’ appointment, the sale process being run by Madison Pacific was already close to conclusion. In particular, Madison Pacific had announced that it was looking for indicative bids by March 16, 2015 with a view to concluding a transaction by mid-April 2015. The reason given for the urgency of the sale was the onset of the rainy season in April / May 2015, together with concerns apparently expressed to Madison Pacific by the Government of Sierra Leone that the mine should restart operations as soon as possible. In their discussions, the Joint Administrators sought to understand the sale process better and to ensure that AML’s interests were being properly dealt with in the circumstances. The Joint Administrators also took the view that the sale process was subject to the statutory moratorium which had come into effect on their appointment. Subsequently, on April 13, 2015 in the absence of confirmation from Madison Pacific that it intended to observe the moratorium, and in the absence of satisfactory answers to their questions to both Madison Pacific and SSHK and SISG regarding the sale process, the Joint Administrators made an urgent application to the High Court. The application sought a letter of request from the English High Court to the High Court of the Hong Kong Special Administrative Region, where Madison Pacific and SSHK are located, seeking their assistance in giving effect to the statutory moratorium to that process. Although the English High Court was prepared to grant the orders sought by the Joint Administrators, the subsequent request for assistance from the Hong Kong Court was declined. The Joint Administrators were informed on April 20, 2015 that SSHR acquired the remaining 75% interest in the Tonkolili iron ore mine for more than $170 million on April 16, 2015. Full details of the sale were not provided to the Joint Administrators, but it is understood that the consideration provided by SSHR was effectively its agreement to repay the amounts then outstanding under the PXF Facility (approximately $170 million). AML was also discharged from its obligations as guarantor of the PXF Facility. Then, in 2019, SISG halted mine operations after its license was cancelled by the Government of Sierra Leone. Then, on September 23, 2020, the Government of Sierra Leone through its Ministry of Mines and Mineral Resources, handed over the ‘new’ Tonkolili iron mine project to Kingho Mining Company Limited. The first shipment of iron ore from the mine (under the ownership of Kingho Mining Company Limited) took place in January 2021. Phase 2 of the project, which is reportedly being financed with a $2 billion loan from CDB (captured via Project ID#92212), officially commenced on March 6, 2021. Then, on May 15, 2021, the Parliament of Sierra Leone ratified a lease agreement with Kingho Railway and Port Company Limited, granting it the ability to manage and operate the infrastructure of the railway and Pepel Port for haulage and export of Kingho Mining Company Limited's iron ore out of the country. The lease agreement also makes provision for Kingho Railway and Port Company Limited to haul the commodity of any other company along the rail corridor under a commercial agreement. Then, on October 19, 2021, Kingho Railway and Port Company Limited officially changed its name to Leone Rock Metal Group.

Additional details

1. The Chinese project title is 唐克里里铁矿项目 or 了山东钢铁收购并开发塞拉利昂唐克里里铁矿. 2. See Project ID#67499 for SISG's second investment in the mine in 2015 and Project ID#67503 for an investment in 2016. 3. African Minerals Limited (AML) was incorporated as a special purpose vehicle (project company) on March 26, 1986 in Canada, and was later registered under the laws of Bermuda on January 29, 2004 as an exempted company. Prior to April 16, 2015, it held a 100 percent ownership stake in four holding companies registered in Bermuda [Tonkolili Iron Ore (TIO), African Minerals Engineering Limited, African Railway & Port Services (ARPS) and African Power Limited (African Power)] and a majority ownership stake in three project companies registered in Sierra Leone [TIO SL, ARPS SL and African Power (SL) Limited.] The $1.5 billion investment in 2012 was made directly at the project company level via a purchase of ordinary shares and individual shareholders’ agreements of each subsidiary of AML. SISG and AML agreed to enter into an offtake agreement before closing in respect of iron ore produced at the Tonkolili Mine. SISG’s investment provided AML with the financial strength to accelerate the development of the Tonkolili Mine. Concurrently, China Development Bank advanced $1.2 billion to Shandong Steel Hong Kong Resources, a subsidiary of SISG, for financing the acquisition of AML’s three subsidiaries (project companies) ini Sierra Leone. 4. By a written agreement dated April 5, 2013, AML, TIO SL and ARPS SL (as borrowers), TIO, ARPS and TIO Trading Limited (as group guarantors), SBSA and SB (as mandated lead arrangers), SB (as account bank, agent and security agent) and SBSA (as original lender) entered into a $250 million pre-export finance facility (PXF) agreement. 5. The Tonkolili mine has a proven reserve of 10.5 billion tons of iron ore. It contains a hematite reserve that is estimated to have 100 to 200 million tonnes in deposit. 6. When the EPC contract between AML and China Communications Construction Company, Ltd. (CCCC) was signed on December 7, 2011, Liu Hao, the Deputy Director-General of the Bureau of International Cooperation from China Development Bank, was in attendance. 6. Kingho Railway and Port Company Limited is a subsidiary company of Kingho Investment Company Limited. It administers the 192 kilometer railway which leads from the New Tonkolili Iron Ore Mines to the Port town of Pepel, in Kamasondo Chiefdom, Port Loko District. It also operates the Pepel shipping port from which Iron Ore are transported outside the country. Both Kingho Mining Company Limited and Kingho Railway and Port Company Limited are subsidiaries of the parent body Kingho Investment Company Limited, which itself is headed by CEO Gilbert Zhao.

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Direct receiving agencies [Type]

Shandong Iron and Steel Group Co., Ltd. [State-owned Company]

Implementing agencies [Type]

Shandong Iron and Steel Group Co., Ltd. [State-owned Company]

African Minerals, Ltd. [Private Sector]

Loan Details

Bilateral loan