This is because it does not have enough working capital, the company said on Monday.
The miner is in a critical situation, battered by a 50 per cent plunge in the iron ore price this year and the effects of the Ebola epidemic in West Africa.
(READ MORE: Ebola shrinks West Africa’s poorest economies)
It is struggling to shore up its battered finances, and its London-listed shares have been suspended since 20 November due to uncertainty about its future.
It also said that its subsidiaries have failed to make in full a loan repayment due at the end of November.
“In the absence of sufficient working capital AML has commenced a temporary controlled shutdown of its operations in Sierra Leone,” the company said in a statement.
“Without a significant injection of working capital, African Minerals 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.”
In September the company outlined a recovery plan that it had hoped would boost revenue and help repay its hefty debt.
The miner is now seeking to sell part of its stake in the Tonkolili mine in Sierra Leone to raise funds. Although it was in talks with “several groups” that have expressed an interest in buying a stake, there is no certainly that a deal will be forthcoming.