* IMIC pledges to overcome mine's infrastructure problems
* Afferro's strategy was flawed, says CEO
By Stephen Eisenhammer
LONDON, May 22 (Reuters) - West Africa-focused miner Afferro has agreed to a $190 million cash-and-paper offer from investment group IMIC that could pave the way for development of its flagship iron ore project.
The deal is unique because IMIC has already sealed a partnership with China - a major potential buyer of the ore - to build transport links so the raw material can be exported.
IMIC, allied with African Iron Ore Group run by Afren founder Bert Cooper, teamed up with a unit of China Railway Group to develop the infrastructure around Afferro's most important asset, the Nkout iron ore project in Cameroon.
"The issue with West and Central Africa is infrastructure. The deposit is there but the infrastructure is not so you're not able to bring the product to market," Haresh Kanabar, chairman of IMIC, told Reuters. "We identified that ... and started building strategic partnerships with large multi-billion dollar Chinese corporations."
BHP cast doubt on the prospects of dozens of West African iron ore projects when it decided earlier this year to pull out of its Mount Nimba project in Guinea.
But the IMIC-Afferro deal has the potential to open up a vital transport corridor for southern Cameroon and the Republic of Congo.
IMIC will offer 80 pence in cash and a two-year convertible loan note with a principle value of 40 pence for each Afferro share.
Afferro shares closed on Tuesday at 70.5 pence and were up 11 percent at 78.35 pence on Wednesday.
"The market is a bit sceptical about the 40 pence convertible loan, which is why it's not trading higher," said analyst Carole Ferguson at SP Angel. "The market is just very sceptical of all bids unless they're full cash at the moment."
IMIC shares were up 2 percent.
The bid is IMIC's first major move as the investment company targets resource projects and businesses in Africa. Kanabar said the group aimed to invest in between two and five junior mining companies in the region.
Afferro had previously hoped to use infrastructure that China's Hanlong Group planned to build as part of its takeover of neighbouring explorer Sundance. That deal collapsed, leaving Afferro with little chance of developing Nkout alone.
"Afferro's strategy was flawed... Our relationships are all directly with the Chinese state-owned companies," Kanabar said.
The IMIC offer also allows China to provide the infrastructure and secure the offtake as a contractor instead of taking over the company itself and the risks associated with it.
Such a structure may sit better with China's more cautious recent approach to investing in projects in Africa.
Afferro Chief Executive Luis da Silva told Reuters he expected to have a definite agreement in place within about two weeks.