AFRICAN Minerals, the Sierra Leone iron ore producer that has plunged 76 percent in London trading this year, cited the outbreak of Ebola and a declining price for its product after the stock reached a five-year low.
The realised price for iron ore from its Tonkolili mine had dropped “considerably” since the start of the third quarter, after falling 20 percent in the previous three months, the London-based company said yesterday
African Minerals is closely monitoring the outbreak of Ebola in Sierra Leone, which had killed 211 people in the west African country until Monday. No cases had been reported at its site, which was operating normally, it said.
African Minerals commented after a four-day trading slump reduced its market value by about 35 percent, with the stock dropping on Tuesday to its lowest level since April 2009. The shares retraced some of the losses yesterday, advancing 3.7 percent to 48.75p by 8.34am, valuing the company at about £160 million (R3 billion).
Two airlines have suspended flights to west Africa, with British Airways opting on Tuesday to join Gulf carrier Emirates in withdrawing services. The UK carrier suspended flights to Liberia and Sierra Leone until August 31, citing the deteriorating public health situation.
African Minerals said that it believed it could manage the movement of its staff, even after the disruption to flights.
Ebola has left medical officials grappling with more than 1 600 infections and almost 900 deaths since March, mostly in Liberia, Guinea and Sierra Leone. It is the worst outbreak of the haemorrhagic fever, according to the US Centres for Disease Control and Prevention.
“Mineral exports, including iron ore and diamonds, are increasingly likely to face disruption if mining companies place local workers on leave” as travel and imports of perishable cargo into Guinea, Sierra Leone, Liberia were disrupted, IHS sub-Saharan Africa analyst Robert Besseling said on Tuesday.
Still, African Minerals said it saw a “substantial improvement in both costs and revenues” in the next two months. The company was operating “in line” with the forecasts it gave the market, with 9.1 million tons of iron ore exported in the first half of the year, it said.
Production for July was on target, and while August brings the peak of the local wet season, the company “remains confident of its performance”.
ArcelorMittal, the largest steelmaker and operator of an iron ore mine in Liberia, said last week it was using thermal scanners to monitor any signs of the disease among employees. “So far, there has not been a disruption to our operations, but clearly this is a daily challenge,” chief financial officer Aditya Mittal said on Friday.
Sierra Rutile said on Tuesday that it had restricted staff travel as a protective measure against the virus. – Bloomberg