The company said it will put the mine on care and maintenance until the $102m of restricted cash is released or it secures short-term funding.
Delay in the release of these funds is due to certain disagreements between the company and Shandong Iron and Steel Group.
African Minerals said: "Without a significant injection of working capital, AML is unable to initiate the cost reduction strategies which would return the operations to cash flow positive status even at recent low iron ore prices."
The company is holding talks with potential buyers over sale of some stake in Tonkolili.
African Minerals CEO Alan Watling said: "While the operating performance of the Project has been impressive during 2014, with Q3 exports of 4.4Mt at an average direct cash cost of $36/t, in spite of the wet season, the fall in iron ore prices and the operational challenges caused by the Ebola disease outbreak has meant the Project has continued to operate at a loss."
