China tries to recoup $700m from bust African Minerals

Billionaire Frank Timis’s failed iron ore miner African Minerals is locked in a $700 million (£560 million) legal battle with its former Chinese partner in Sierra Leone, the Standard can reveal.

State-owned steel giant Shandong claims to be a creditor of the bust miner and has filed a claim for the amount, according to the latest report by African Minerals’ administrators Deloitte.

The proof of debt was rejected by Deloitte, but Shandong — which is still operating and investing in the mine — has appealed the rejection.

“The matter is currently before the English Court,” administrators’ said. A trial is unlikely before 2018.

In 2015, the Chinese steel firm, then a 25% stakeholder, bought the rest of the Tonkolili mine, which is one of Africa’s biggest iron ore mines, from African Minerals for a knock-down $170 million in 2015 after taking control of some of its debts from banks including Standard Chartered and Citi.

Shortly after, London-listed African Minerals, which was founded by Romanian-Australian billionaire Timis, went into administration, unable to cope with the collapse in iron ore prices and the ebola outbreak.

African Minerals is also being pursued in the High Court by local residents in Sierra Leone over evictions and the treatment of mine workers.

It was the largest company on AIM with a market value of more than £2 billion just six years ago.

Timis was arrested twice for possession of heroin in the Eighties and was deemed “unsuitable” to be a director of a company by the Toronto Stock Exchange for failing to disclose those convictions.

His previous AIM firm Regal Petroleum was fined a record £600,000 for misleading investors about its well results off the Greek coast.

His Timis Corporation controversially bought the operations of London Mining, another iron ore miner in Sierra Leone, out of administration shortly before African Minerals went bust.