Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Centamin Has Biggest Drop on Egyptian Fuel Dispute: London Mover

Centamin Plc, a gold producer in Egypt, fell the most on record in London trading after halting production as a diesel dispute cut supplies to “critical levels.”

Centamin plunged as much as 64 percent, the steepest decline since it first sold shares in 2001, to 19 pence, and was at 30.91 pence at 1:40 p.m. Centamin said today it was sent an “illegal retrospective claim” by Egyptian General Petroleum Corp., or EGPC, for $65 million for diesel and won’t receive fuel for its Sukari mine until the amount is paid.

“Due to a resultant lack of diesel and a shortfall in working capital in Egypt for the local operations the decision has been taken to suspend operations at Sukari and to place the mine on care and maintenance until these issues are satisfactorily resolved,” Centamin said in a statement.

The gold producer has been dogged by operational and political delays in Egypt since last year’s uprising that led to the ousting of former President Hosni Mubarak. Centamin dropped as much as 59 percent on Oct. 30 after Egypt’s administrative court issued a preliminary ruling to annul its 18-year-old concession agreement with the government. Joint venture partner, the state-owned Egyptian Mineral Resources Authority, said it would appeal the decision.

“There seems to be some political aspect to EGPC’s decision,” said Yousef Hussein, research associate at Cairo-based investment bank Egyptian Financial Group-Hermes Holding. “I don’t think it’s a liquidity issue. If it was, they would have done it across the board with other companies.”

‘Arbitrary Request’

EGPC Chairman Hani Dahi didn’t respond to calls and a text message requesting comment.

The process of Centamin restarting gold exports has also been delayed by an “unforseen and arbitrary” request from customs officials for prior approval by the Finance Minister, the company said. “This approval has been urgently sought, but has not yet been forthcoming,” it said in its statement.

Centamin temporarily halted mining in both March and July because of labor unrest related to a pay dispute.

The latest suspension, “coupled with the ongoing legal claim and political shenanigans on a national level, make Centamin a hot potato,” Numis Securities Ltd. said in a note to investors today. “In our view, one to avoid for now.”

The slump extends the stock’s drop to 62 percent this year, after it tumbled 53 percent in 2011 as Egyptian political instability deterred investors, and supply interruptions and curbs on blasting at Sukari led Centamin to cut initial production targets.

Centamin targets annual gold output of 250,000 ounces at its Sukari mine. The company, which produced 177,415 ounces in the first nine months of 2012, didn’t say how the latest halt would effect its full-year target.

Capital Drilling Ltd., which provides drilling rigs to Centamin, fell as much as 42 percent to 15.5 pence, the most since it first sold shares in 2010, and traded at 15.875 pence at 1:46 p.m. in London.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.