London Mining Plc, the second-largest iron ore producer in Sierra Leone, said it will boost spending to raise output to 6 million metric tons a year.
The company, which produced 1.5 million tons of the steel-making ingredient in the first six months of the year, will spend $40 million in 2014 to expand output, it said in a statement today. London Mining will spend another $240 million in 2015 and 2016 to extend the life of its Marampa mine.
“Overall the project economics are better than we (and we think consensus) expected and this announcement builds on the positive operational momentum seen over the past year,” Credit Suisse Group AG said in a note to investors today.
London Mining has focused on developing the Marampa mine after selling a Brazilian iron-ore project to ArcelorMittal for $810 million in 2008. The company said today that the mine had reserves to operate for more than 40 years and produce iron ore at $42 to $45 a ton.
London Mining rose as much as 14 percent, the steepest intraday gain since Aug. 22, and advanced 8.2 percent to 122 pence by 9:08 a.m. in London.
African Minerals Ltd. is the biggest iron-ore miner in Sierra Leone.