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* Approval granted on Wednesday by mines ministry
* Tambao mine contains 100 mln tonnes of manganese
OUAGADOUGOU, May 15 (Reuters) - A project led by Pan African Minerals to develop the Tambao manganese project in Burkina Faso will cost up to $1 billion, the chairman of holding group Timis Corporation said on Thursday, a day after receiving the government's green light.
The manganese mine in the north of Burkina Faso, near the border with Niger and Mali, is thought to contain over 100 million tonnes of the metal, used in steel production.
Tamboa, which Timis says will be the biggest manganese mine in the world, is a priority for the West African country's government as it seeks to diversify its economy away from reliance on gold and cotton.
"The Tamboa project is an integrated project with a mining component and an infrastructure component, notably through the roads, railway and the port...," said Romanian billionaire Frank Timis, whose firm controls Pan African Minerals (PAM).
"This project will happen in the next three years and will require investment of nearly $1 billion."
PAM won exploration rights for the site in 2012 but the government only granted the exploitation permit on Wednesday. Production is provisionally forecast at around 3 million tonnes a year.
Souleymane Mihin, head of PAM in Burkina Faso, said the investment would be shared out between Timis, Canadian asset management firm Dundee Corporation and natural resources fund CD Capital, without giving a breakdown.
PAM previously estimated that the total investment cost would be $650 million.
Burkina Faso's mines minister Salif Kabore said extraction from the mine was set to begin in July and that the commodity would be for sale on international markets starting from December or January 2015.
PAM's Mihin confirmed that shipments of manganese would begin by road in October. Timis said that shipments by rail would take between one to two years to start. (Reporting by Mathieu Bonkoungou; Writing by Emma Farge, editing by David Evans)