JOHANNESBURG (miningweekly.com) – A company established by African Minerals Limited (AML) executive chairperson Frank Timis has stepped in to buy embattled London Mining’s Sierra Leone assets for an undisclosed amount.

AML gave the go-ahead to Timis, in his personal capacity, to acquire the Marampa mine, through Timis Corporation, after AML decided not to buy the asset, given the potential impact on the debt-refinancing schedule that was currently under way with Standard Chartered Bank.

In October, West African iron-ore miner London Mining decided to place the company into administration under the auspices of PwC, after facing high costs, a sharp drop in iron prices and the impact of the Ebola virus on operations at its Marampa mine, in Sierra Leone.

Earlier this month, resource investment company Cape Lambert entered into a term sheet with Timis to provide that company with about $20-million – an $8-million bridging finance facility and some $12-million to buy a royalty – for its planned acquisition of Marampa.

Previous reports suggested that the now Timis-owned mine would produce between five-million and seven-million tonnes of iron concentrate a year.

“It is very pleasing to see that the Marampa mine will continue to be a major source of employment in Sierra Leone. The quick resolution by the administrators and Timis Corporation has prevented the closure of an important asset for the local and national community,” said AML CEO Alan Watling.

The Marampa mine, which is 120 km from AML’s Tonkolili mine, employed well over 1 000 people.

AML had granted Timis access to a six-million-tonne-a-year iron-ore capacity on its African Railway and Port Services subsidiary’s rail and port infrastructure.

The deal, which remained subject to completion of commercial terms and any regulatory approvals, including the requirements of the Aim rules, would lead to reduced infrastructure operating costs per tonne.

“AML will benefit substantially from lower infrastructure costs by virtue of higher tonnage, as well as the opportunities that will become possible through blending our combined products, accessing new markets in Europe and reducing our combined freight costs as a result, saving an estimated $12/t on current prices,” explained Watling.

Further, AML and Timis agreed to undertake joint studies on the possibility of blending Marampa’s 65% iron product and Tonkolili’s 58% iron product to enable access to Europe’s steelmaking markets.