* Shandong takes control of Tonkolili holding companies
* African Minerals shares could be cancelled in a month
* Is second Sierra Leone miner to go into administration (Adds quotes from the company, details)
By Silvia Antonioli
LONDON, March 6 (Reuters) - Sierra Leone-focused miningcompany African Minerals said on Friday it will appointadministrators after failing to repay its lender and partner inthe Tonkolili iron ore project Shandong Iron and Steel Group.
After taking on some of African Minerals' debt from banksand demanding immediate repayment last week, Shandong, whichowns 25 percent in Tonkolili, took control of the holdingcompanies in the project.
"...The board has concluded that there is no reasonableprospect of it being able to achieve a negotiated solution with(Shandong)," African Minerals said in a statement.
"The company is working to identify an appropriateinsolvency practitioner to represent and protect the interestsof the creditors and stakeholders."
London Mining, a company which owned Marampa, an iron oremine near Tonkolili, also went into administration last year.
Both companies have been battered by costs related to theEbola outbreak in West Africa and a rout in iron ore prices overthe last year. In November, African Minerals' chairman andfounder Frank Timis bought Marampa and agreed access forMarampa's iron ore to African Minerals' rail and portinfrastructure.
In late November, African Minerals shut its operations inSierra Leone due to a lack of working capital and its shareshave been suspended since Nov. 20 due to uncertainty about thecompany's future.
On Friday, the company said the future of the holdingcompanies which own Tonkolili and their ability to paycreditors, obtain funding and restart operations was nowentirely in the hands of Shandong.
African Minerals' adviser and broker, Jefferies resignedwith immediate effect. "Failure of the company to appoint areplacement nominated adviser within one month from today willresult in cancellation of the listing of its shares on AIM," themining company said. (Editing by Elaine Hardcastle and David Evans)