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Iron-ore miner increases production by 250% in Sierra Leone mine

17th January 2014

By: Carina Borralho

  

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UK-based high-grade iron-ore concen-trate producer London Mining reports that production at its Marampa mine, in Sierra Leone’s Port Loko district, has risen by 250% since the inception of the mine in 2011.

In the first year of mining operations, 1.5-million tonnes were mined, with a five-million-tonne a year rate expected for the end of 2013. “We plan to reach 6.5-million tonnes by the end of 2014,” says London Mining CEO Graeme Hossie.

He believes that production at the mine has improved as a result of the experience and knowledge the company has gained over the course of its operations so far.

Hossie highlights that London Mining has expanded its operations in Sierra Leone as additional mineral resources were discovered.

“During the drilling process, which helped us to understand the ore we were working with, we discovered significant quantities of easily friable weathered ore, which could be processed by the plant we originally designed to process the tailings from previous mining operations,” he says.

The unexpected availability of this addi-tional ore helped London Mining increase production and the company has built three plants to process the ore. “This expansion will help London Mining establish a bigger footprint in Africa,” says Hossie.

Prior to the establishment of the Marampa mine in 2011, London Mining had to conduct a significant amount of research, owing to the poor state of the iron-ore mining industry in Sierra Leone at the time.

“The Sierra Leone government developed a new Mining Act in 2009 and, in 2010, London Mining received all the required approvals and licences to begin mining operations, after which we started investing in and building the mine,” says Hossie.

Sierra Leone

London Mining says it is helping drive Sierra Leone’s rapid economic growth, and the country is benefiting from other companies that, recognising its potential, are starting to invest in and provide services in the country.

Hossie says, while London Mining is not a large company, the work it is doing in Sierra Leone will impact positively on the country. “What we have been trying to do since day one of mining operations is to implement the best mining practices in the industry, which have been learnt over many years,” says Hossie, who adds that, at present, the Marampa mine is operating well.

He also says London Mining is taking a long-term approach to Sierra Leone’s potential, and plans to continue investing in it.

Hossie highlights that the Sierra Leone government is committed to improving the country’s economy by looking after foreign investors. “Post war, Sierra Leone had very little capital available and government is seeking foreign investment to restart the mining industry and other industries that were profitable in the past.”

Challenges

“Establishing a new mine in a country that has not had mining operations in 40 years was not without difficulties, which included a lack of infrastructure and local suppliers,” says Hossie, adding that, as a result of investor uncertainty in the country, there were not many contractors from which London Mining could choose.

Some of the initial challenges identified by London Mining involved importing equipment and supplies into Sierra Leone. “This also included bringing some of the best mining expertise available,” says Hossie, adding that the privatisation of the Freetown port, which was taking place, posed a further challenge as it was occurring during the intense construction period.

He highlights finding investment as one of the biggest challenges that London Mining faced before operations could start. “In about 2006, Sierra Leone was being portrayed to the rest of the world as a dangerous place and, therefore, a risky investment.”

He adds that this perception was inaccurate and that London Mining has had the task of convincing investors that Sierra Leone is a safe investment destination.

Hossie notes that, at the time, Sierra Leone had not proven itself to be a viable place in which to do business and that London Mining had not proven that it was capable of operating a successful mine in the country.

Owing to the risk premium, London Mining started off with higher-cost contracts. “However, since we have now proven the mine’s success and have been expanding significantly since production started at the end of 2011, prices have dropped signifi- cantly,” says Hossie.

He further highlights the unpredictable weather and heavy rainy seasons that are common to Sierra Leone as another challenge facing Marampa mining operations. “Depending on the ore that you are mining and the product that you are producing, there can be moisture issues,” he says.

London Mining processes ore to convert it to a concentrate, which is suitable for the rainy season. “The four-month rainy season is extremely heavy and has taught us to schedule our mining activities so that enough ore is mined in the dry season to cover the periods in the rainy season when mining is more difficult,” says Hossie.

He states that further complications can arise when some shipping companies will not allow shipping to take place during heavy rains and, therefore, careful logistics planning is needed.

The challenges faced by London Mining during the build- up to its Marampa operations meant that it had to gather a team of skilled individuals, which have formed a strong team, notes Hossie.

Skills Development

The development arm of the German government is co-investing with London Mining in Sierra Leone and they plan to establish a technical vocational training college. “This college aims to serve the skills development requirements of the locals in Sierra Leone, particularly in the mining industry,” says Hossie.

Further, the company is also working with nongovernmental organisations to establish literacy programmes and agricultural programmes aimed at improv- ing the quality of life for the locals and increasing economic diversity.

London Mining is investing 1% of its total income to community development programmes.

Job Creation

There are about 1 500 full-time operational employees at the Marampa mine and about 1 500 people are employed in construction and contracting. Of these employees, fewer than 100 are expatriates, which means that about 93% of the employees at the mine are locals.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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