African Minerals announces Tewoo buys $990m stake

African Minerals announced that Tianjin Materials and Equipment Group Corp, also called Tewoo, one of China's largest iron-ore trading companies, agreed to pay $990 million for a 16.5 percent stake in the iron ore miner African Minerals' Tonkolili mine in Sierra Leone, which is valued at $6 billion.

Under the terms of Thursday's "strategic, binding" memorandum of understanding, Tewoo will acquire 36.5 million shares at $390 million.

The move marks the second major deal with China for the African company. Last year, London-listed African Minerals struck a $1.5 billion deal with Shandong Iron & Steel Group to finance its operations, which produce 20 million metric tons a year.

The deal is also a reflection of the world's largest steel-producing nation's return to a market for global metal assets amid a recent commodity slump.

According to data from Dealogic, since 1995 China has invested about $60 billion overseas in iron-ore assets. But earlier reports said that major acquisitions, including the $8 billion Sino Iron project, 1,440 km north of Perth and the $3 billion magnetite project in Western Australia, have run into years of delays or been suspended altogether amid chronic cost overruns.

Iron-ore prices fell about 28 percent during the January to May period, due in part to slower economic growth in China.