Sierra Leone's Iron Ore Industry Back in Business After 30 Years

London-listed company African Minerals recently achieved a remarkable milestone with its shipment of a first batch of iron ore from its mine in central Sierra Leone, the country's first export of the commodity after almost 30 years.

The 40,000 metric ton shipment left last week and is bound for China's Shandong Iron and Steel Group, the world's ninth-biggest steelmaker.

Years of war had destroyed the potential of the West African nation's mining industry.

"(The shipment is a) significant milestone for (our country) as we re-establish as a major player in the mining industry. The redevelopment of Sierra Leone and our country's economy will continue to progress," Ernest Bai Koroma, Sierra Leone's president, said in The Christian Science Monitor.

African Minerals started extraction in December 2010 and stockpiled the ore as it finished building a 120-mile railway and renovated the Pepel port to handle the exports. The company estimates annual production will reach 20 million metric tons by 2013.

Shandong agreed to pay $1.5 billion for a 25 per cent stake in the African Minerals project. The deal also guarantees Shandong a 25 per cent take of the mine's output. The companies, whose partnership has yet to be approved by Chinese authorities, expects to receive a final nod before yearend.

African Minerals' Tonkolili mining complex, with its 12.8 billion metric tons of iron ore, is one of the world's largest defined reserves of the commodity.

Global miners Vale, BHP Billiton, and Rio Tinto have long dominated the market for iron ore. But African Minerals and other junior miners have started to enter the industry in West Africa. Aside from Sierra Leone, new projects by minor companies are underway in Guinea, Liberia, and Cameroon.

A vital ingredient in steelmaking, global consumption of iron ore has skyrocketed spiked in recent years, largely spurred by growing demand from China.

In 2010, the world's second-largest economy produced 44 per cent of the world's steel output.