UPDATE: Sierra Leone's Iron Ore To Outshine Diamond Revenue

13th Jul 2010 15:39

(Adds quote from minister and details.) By Devon Maylie Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Iron ore production in Sierra Leone will make a bigger contribution to the national annual revenue in five years' time than the country's traditional money-earner diamonds, Sierra Leone's mineral resource minister said Tuesday. "Iron ore is the mineral that will make a difference," Alpha Kanu told Dow Jones Newswires. Sierra Leone-focused iron ore miner African Minerals Ltd. (AMI.LN) Tuesday said it agreed a $1.5 billion investment in its Tonkolili project from Shandong Iron & Steel Group Co of China. African Minerals is targeting output of 25 million metric tons a year by the fourth quarter of 2012, up from between 8 million and 10 million tons planned for when production starts in the fourth quarter of 2011. African Minerals' chairman is Frank Timis, who was chief executive of AIM-listed Regal Petroleum PLC (RPT.LN) in 2009 when the company was hit with a fine for making misleading statements about the potential of the group's oil wells. The Tonkolili project is Sierra Leone's flagship mine and revenue from royalties and taxes paid to the government should account for half the national annual budget within five years, Kanu said. Currently it's budget is $300 million. In 2010, Kanu expects diamond exports of around $150 million to $250 million. They were $84 million in 2009, the government previously said. "Blood diamonds were a bad phase in our history," Kanu said. African Minerals isn't the only iron ore mine operating in the country. London Mining PLC (LOND.OS) is developing the smaller Marampa iron ore mine and targets production of 1.5 million tons annually by 2011 that will increase to 3 million tons and then 10 million tons by 2013. Australia's Cape Lambert Iron Ore Ltd. (CFE.AU) is also looking at the mineral in Sierra Leone, Kanu said. -By Devon Maylie, Dow Jones Newswires; +44 (0)20 7842 9483; [email protected] (END) Dow Jones Newswires July 13, 2010 10:39 ET (14:39 GMT)