London Mining says Ebola outbreak could hit iron ore production

by Reuters 0

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It also said the outbreak of the deadly Ebola virus across West Africa could hurt production in the second half.

(READ MORE: Liberia fights Ebola in capital, W.Africa toll tops 1,200)

The company’s shares fell as much as 18 per cent to 32.75 pence in early trading, making them the biggest percentage loser on the London Stock Exchange on Thursday.

London Mining, which operates the Marampa mine in Sierra Leone, said the Ebola outbreak had disrupted its supply chain and delayed a plant optimisation programme at the mine.

(READ MORE: Africa needs to look inward to tackle Ebola)

The company cut the top end of its full-year iron ore production forecast to 5.1 million wet metric tonnes from 5.4 million, while maintaining the lower end at 4.9 million tonnes.

London Mining said it had deferred more than 20 million dollars of non-essential capital expenditure planned for the year until market conditions improve or it completes the search for a strategic partner that it began earlier this year.

The company posted a loss of 10.8 million dollars before interest, tax, depreciation and amortisation for the six months ended June 30, compared with a profit of 24.0 million dollars a year earlier.

Revenue fell 22 per cent to 110.6 million dollars.

Production rose 24 per cent to 2.1 million wet metric tonnes.

Iron ore prices fell to a 21-month low of 89 dollars per tonne in mid-June as supply continued to outpace demand in China.

Benchmark 62-per cent grade iron ore for immediate shipment to China .IO62-CNISI fell 31 per cent in the first six months of the year to average 111.5 dollars per tonne.