London Mining Plc (LOND) cut its full-year target for iron-ore production on the risk to its operations in Sierra Leone from the spread of the deadly Ebola virus.
The company’s shares slumped as much as 19 percent in London trading, the biggest drop in a more than a month.
“We don’t think the high end of guidance is achievable,” Chief Executive Officer Graeme Hossie said today in an interview in London. “Given the increasing travel restrictions there’s some disruption to the movement of people and the movement of parts. We’re not considering that we can operate with the full effectiveness that we would normally be able to rely on.”
The outbreak, the worst since the virus was first identified in the Democratic Republic of Congo in 1976, has affected 2,240 people and killed at least 1,229 through Aug. 16, in Guinea, Sierra Leone, Liberia and, most recently, Nigeria, according to the World Health Organization.
London Mining, operating the Marampa mine in Sierra Leone, said in June it imposed measures to protect staff. The business hasn’t been affected by Ebola so far, it said today.
The company now forecasts production of 4.9 million wet tons to 5.1 million wet tons of iron ore for 2014, compared with an earlier prediction of 4.9 million to 5.4 million wet tons.
ArcelorMittal (MT), the world’s biggest steelmaker, said on Aug. 8 that expansion of its iron-ore mine in Liberia had been disrupted after contractors halted work because of the threat of the virus. It said mining was continuing normally at the site.
London Mining sank 11 percent to 35.75 pence by 9:12 a.m. in the city. Falling iron-ore prices and the threat from Ebola have dragged the shares down 68 percent this year.
The company is discussing funding Marampa’s expansion with potential partners. “We have a process ongoing where we have received indications of interest and we expect to achieve an investment towards the end of the year,” Hossie said.
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