African Aura Mining has been granted a mineral development agreement by the Government of Liberia for the Putu iron ore project.
The total investment in the project is expected to reach $2.5bn.
African Aura Mining said the government agreed to a 25-year plan for the construction and development of the Putu iron ore project in eastern Liberia.
The mine is expected to produce 20 million metric tons of iron ore annually.
African Aura Mining holds a 38.5% interest in the Putu project, while the remainder is held by Russia's largest steelmaker, OAO Severstal.