China’s Shandong Iron and Steel Group agreed to pay a total of US$1.5 billion to African Minerals (AMI.LSE) for a minority stake in a non-producing iron ore project in Sierra Leone, the Financial Times reported. In exchange for an upfront US$800 million, followed by two other payments for a total of US$1.5 billion, the Chinese firm will gain a 25% stake in African Minerals’ Tonkolili mine and two related African Minerals subsidiaries. The firm will also secure a long-term supply of 10 million annual tons of iron ore from the site at a 15% discount from the spot price. The deal currently remains a "binding memorandum or understanding," but is expected to become a definitive agreement in September.