Update on Shandong, Commissioning & Marketing

15 December 2011

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

Update on Shandong Investment, Project Commissioning, and Marketing

Highlights

·; Shandong Test Shipment vessel en route to China

·; Shandong closing date deferred to allow completion of product testing

·; Sales progressing well, with all 2012 and 2013 production allocated to long term offtake commitments

·; Commissioning and ramp up is progressing well on the mine, rail and port

·; 2011 mine production and processing expected to exceed forecast 1.2mt

·; 2011 export guidance of 1.2mt will not be achieved due to port stacker remediation work

·; 2012 export guidance remains unchanged at 15mt

African Minerals Limited (AIM: AMI) is pleased to provide an update on progress towards execution of the $1.5bn investment by Shandong Iron and Steel Group ("Shandong"), sales and marketing developments, and the commissioning of its Tonkolili Phase I project, which commenced exports of iron ore from Sierra Leone in November.

An initial trial shipment for Shandong of 39,000t of Direct Shipping Ore ("DSO"), which utilised the fully integrated mine, rail and port infrastructure built by AML, was successfully loaded and sailed for China on 22 November 2011.

Given the time required to complete delivery and testing of the product - which is a pre-requisite to the closing of Shandong's $1.5bn investment - the test shipment will not arrive in China in time to achieve the planned closing date of 31 December 2011. AML and Shandong have mutually agreed to defer the closing date for up to four weeks after arrival of the trial shipment.

Sales and marketing of the DSO product has exceeded expectations, with all 2012 and 2013 production allocated to long term offtake commitments.

Commissioning of the port and rail is progressing well, and the most significant outstanding issue is remedial engineering work on the butterfly stacker. Modifications by the original equipment manufacturer are in progress and are expected to be completed by 30 December 2011, with a temporary solution already in operation to allow some stockpiling.

Mine production and processing is continuing as scheduled, and is expected to exceed the forecast 1.2mt in the current quarter. To date AML has loaded four vessels and exported 124,000t of material, bypassing the stockyard and directly loading customer vessels at the Pepel shiploader. Total exports in 2011 will fall short of the 1.2mt guidance due to reduced throughput during the stacker remediation work.

With rectification of the stacker, prospects for 2012 are on track. We also aim to commission the 15mtpa Phase I DSO process facility during Q1 2012, with ramp up to its full capacity by the end of Q2 2012.

Guidance for 2012 export remains unchanged at 15mt, with 20mtpa in 2013 and beyond.

Commenting on this update AML Executive Chairman, Frank Timis said

"I am encouraged by the progress being made and the continued improvement in our production capability. We recognise that the commissioning has been slower than originally envisaged and we see no long term impact to production levels. We are also very pleased with the strong demand for our Phase I DSO product.

AML remains confident of completing the investment by Shandong in early 2012, subject to satisfactory testing of the trial shipment and final regulatory approvals."

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

About AML

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 is expected to produce 20 million tonnes of iron ore per annum at full capacity.

Phase II now contemplates a 30Mtpa expansion, taking production to 50Mtpa, and the establishment of an expanded port facility at Tagrin Point, a new standard gauge, heavy haul railway from Tonkolili to Tagrin Point, and an expanded production facility at the mine to produce a 64% high grade hematite concentrate.

African Minerals and its contractors currently employ approximately 7,300 people in Sierra Leone, 85% of whom are Sierra Leonean nationals.

The Company has developed significant port and rail infrastructure to support the operation of the project, via its subsidiary African Rail and Port Services (SL) Limited ("ARPS"), in which the Government of Sierra Leone has a 10% free carried interest. With the exception of this interest, the Tonkolili project companies are currently owned 100% by AML.

The Company has also executed a definitive agreement with Shandong Iron and Steel Group ("Shandong") whereby Shandong will invest $1.5Bn at the project level to acquire a 25% interest in the project companies, with associated product offtake. The investment is subject to Chinese regulatory approvals and receipt and satisfactory testing of trial shipment material.

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