Shandong due to complete, $868m financing closed

NOT FOR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO THE U.S., AUSTRALIA, OR JAPAN, OR IN ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW

13 February 2012

African Minerals Limited ("AML" or "the Company")

Shandong $1.5bn investment due to complete

$868m financing closed

Shandong Iron and Steel Group ("SISG" or "Shandong") has notified African Minerals that relevant approval has now been received from the China National Development and Reform Committee regarding SISG's proposed $1.5bn investment in the Tonkolili iron ore project. SISG has also confirmed that testing of the trial shipment has been successful and that Tonkilili iron ore is of sufficient quality to satisfy the condition precedent to closure of the transaction. The offtake agreement described in the announcement of 1 August 2011 has also now been finalised.

Receipt of the remaining Peoples Republic of China Government approvals is expected shortly and AML and SISG have therefore agreed to extend the long stop date for closure of the transaction until the end of March 2012.

African Minerals also confirms receipt of funds following settlement of the $350m convertible bond issue announced on 31 January 2012. The settlement of the convertible bond proceeds and the drawdown of the $417.7m Standard Bank facility to repay the previous secured loan facility, as announced on 9 February 2012, completes the $868m financing package announced on 31 January 2012.

Frank Timis, Executive Chairman of AML commented:

"NDRC approval together with the positive results from the testing of the trial shipment represents major progress towards completing the Shandong transaction. We very much look forward to our partnership with SISG and closing the transaction upon receipt of the final PRC approvals.

Following the successful funding announced last week and the expected closing of the deal with SISG, AML is well positioned to complete Phase I, ramping up to 20mtpa by the end of 2012, and to commence its Phase II expansion programme."

Ends

Contacts:

African Minerals Limited

+44 20 3435 7600

Mike Jones

Aura Financial

+44 20 7321 0000

Michael Oke / Andy Mills 

Deutsche Bank

+44 207 545 8000

Rupert Green

African Minerals is developing its Tonkolili iron ore project in Sierra Leone, with a JORC compliant resource of 12.8Bnt. The project, which currently has a 60+ year mine-life, is being developed in 3 phases. Phase I of the project is fully funded and at full capacity is expected to produce 12 million tonnes of iron ore per annum once it ramps up from initial production in Q4 2011. Phases II and III are expected to boost production incrementally by 23Mtpa and 45Mtpa respectively. African Minerals and its contractors currently employ approximately 5,000 people in Sierra Leone, 78% of whom are Sierra Leonean nationals.

The Company is also developing significant port and rail infrastructure to support the development of the project, via its subsidiary African Rail and Port Services (SL) Limited ("ARPS"), in which the Government of Sierra Leone has the right to acquire a 10% interest. With the exception of this interest, the Tonkolili project companies are wholly owned by AML.

www.african-minerals.com

About SISG:

Shandong Iron & Steel Group Co., Ltd (SISG) is one of the largest iron and steel groups in China specialising in the smelting, processing and the sale of steel and related commodities. It is currently the world's ninth largest steel group

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