Russell Downs and Peter Dickens of PwC have been appointed as joint administrators of steel supply specialist London Mining, which owns and runs a major iron ore mine in Sierra Leone and has been hit by a sharp drop in commodity prices coupled with the impact of the ebola virus in West Africa
The company produces high specification iron ore concentrate for the global steel industry from its 100% owned Marampa Mine, employing around 1,400 people. It is a significant contributor to the local and national economy, with reserves of iron ore to support production for more than 40 years.
Graeme Hossie, chief executive of London Mining, said: ‘Since first entering Sierra Leone in 2005, London Mining has established substantial operations at Marampa having brought back commercial mining and related economic activity to the region after 40 years.
'I salute all our employees for their dedication and contribution in creating what is now an important part of Sierra Leone's economy and ongoing development. I also applaud them for the ongoing leadership role our team has played within the private sector in Sierra Leone in helping address the challenges of the current Ebola crisis.
London Mining filed for administration following severe liquidity issues, primarily caused by a dramatic reduction in the price of iron ore. It has also faced additional costs and challenges as a result of the Ebola outbreak.
The company has completed feasibility studies outlining plans for the development of projects in Greenland and Saudi Arabia. It has also been in advanced discussions with a number of companies interested in acquiring its West Africa operations.
Russell Downs, joint administrator and partner at PwC said: ‘The collapse in iron ore prices and the resulting impacts on this business have been very dramatic.
'Our focus is to ensure that a buyer is found for the Marampa Mine operations given it is such an important part of the Sierra Leone economy.
'We are liaising with key stakeholders and asking for a short window of forbearance as we look to conclude a transaction.’
The joint administrators said their aim was to support the ongoing mining operations from the limited resources available to them, while monitoring developments carefully and working with the directors of the operating company. There is limited liquidity available and priority will be given to payments to the employees at Marampa, both local and ex-pat.
