Iron ore producer African Minerals to go into administration

* 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 mining company African Minerals said on Friday it will appoint administrators after failing to repay its lender and partner in the Tonkolili iron ore project Shandong Iron and Steel Group.

After taking on some of African Minerals' debt from banks and demanding immediate repayment last week, Shandong, which owns 25 percent in Tonkolili, took control of the holding companies in the project.

"...The board has concluded that there is no reasonable prospect of it being able to achieve a negotiated solution with (Shandong)," African Minerals said in a statement.

"The company is working to identify an appropriate insolvency practitioner to represent and protect the interests of the creditors and stakeholders."

London Mining, a company which owned Marampa, an iron ore mine near Tonkolili, also went into administration last year.

Both companies have been battered by costs related to the Ebola outbreak in West Africa and a rout in iron ore prices over the last year. In November, African Minerals' chairman and founder Frank Timis bought Marampa and agreed access for Marampa's iron ore to African Minerals' rail and port infrastructure.

In late November, African Minerals shut its operations in Sierra Leone due to a lack of working capital and its shares have been suspended since Nov. 20 due to uncertainty about the company's future.

On Friday, the company said the future of the holding companies which own Tonkolili and their ability to pay creditors, obtain funding and restart operations was now entirely in the hands of Shandong.

African Minerals' adviser and broker, Jefferies resigned with immediate effect. "Failure of the company to appoint a replacement nominated adviser within one month from today will result in cancellation of the listing of its shares on AIM," the mining company said. (Editing by Elaine Hardcastle and David Evans)