The ramp-up of London Mining’s (LON:LOND) Marampa Mine in Sierra Leone remains on track, the company said today as it posted a 26 per cent increase in quarterly production to 397,000 wet metric tons of iron ore.
The group is targeting output of 1.5 million tons of premium quality ore this year, which is being shipped to customers in China.
The plan is to raise capacity to 5 million tons next year, while a feasibility study is underway to increase that figure further to 9 million tons.
Chief executive Graeme Hossie revealed that a combination of softening spot prices and the extended commissioning of the company’s transshipment platform had conspired to reduce the company’s profit margins.
“However we expect a significant margin uplift once we commence loading of larger, ungeared vessels in the third quarter,” he added.
“Overall, we are pleased with the progress we have made this quarter, with logistics from mine to ship proven to be robust in the earlier than expected wet season.”
London Mining said it is currently assessing five tenders for a three-year mining contract.
“The tenders being considered reflect increased market rates for international mining contractors in Sierra Leone and costs for 2012 and 2013 are expected to be higher than previous guidance as a result of this contractor price inflation,” the company added.
“Longer term solutions, including owner-operator mining, will be considered as part of the bankable feasibility study.”