African Minerals Ltd., the Sierra Leone iron-ore miner that’s 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 realized price for iron ore from its Tonkolili mine has dropped “considerably” since the start of the third quarter, after falling 20 percent in the previous three months, the London-based company said today in a statement. African Minerals is closely monitoring The outbreak of Ebola in Sierra Leone, which had killed 211 people in the West African country as of Aug. 4. No cases have been reported at its site, which is operating normally, it said.
African Minerals commented after a four-day trading slump reduced the company’s market value by about 35 percent, with the stock dropping yesterday to its lowest level since April 2009. The shares retraced some of the losses today, advancing 3.7 percent to 48.75 pence by 8:34 a.m., valuing the company at about 160 million pounds ($270 million).
Two airlines have suspended flights to West Africa, with British Airways opting yesterday to join Gulf carrier Emirates in withdrawing services. The U.K. carrier suspended flights to Liberia and Sierra Leone until Aug. 31, citing the deteriorating public-health situation. African Minerals said it believes it can 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’s the worst outbreak of the hemorrhagic fever, according to the U.S. Centers 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 are disrupted, IHS sub-Saharan Africa analyst Robert Besseling said yesterday in e-mailed note.
Still, African Minerals said it sees a “substantial improvement in both costs and revenues” in the next two months. The company is operating “in line” with the forecasts it gave the market, with 9.1 million metric 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 world’s 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 Aug. 1.
Sierra Rutile Ltd., said yesterday it had restricted staff travel as a protective measure against the Ebola virus. There have been no reported or suspected cases of the illness at its Sierra Leone operations.