London-listed African Minerals was making continued pro- gress towards stabilising its Tonkolili iron-ore operation at the 20-million-tonne-a-year level, new CEO Bernie Pryor said last week.

Pryor was appointed CEO of the company on August 14, replacing Keith Calder, who became CEO in July last year.

The Tonkolili operation, in Sierra Leone, achieved an export rate of 20-million tonnes a year during the second quarter, with total production for the six months ended June amounting to 6.1-million tonnes, of which 5.5-million tonnes was exported.

African Minerals also reported revenue of $405-million for the first half of 2013, with earnings before interest, taxes, depreciation and amortisation, and operating exceptional items amounting to $99-million.

The company recorded a total loss for the period of $18-million, compared with a loss of $107-million a year earlier, and reported group cash of $502-million as at June 30.

“The first half of 2013 has demonstrated strong volume, production and sales capability, coupled with the benefits of improved financial control and, therefore the ability to reduce cash cost,” Pryor commented.

African Minerals executive chairperson Frank Timis added that after a good start during the first half of this year, the com- pany’s executive team would now focus on stabilising the Tonkolili project to produce consistently at 20-million tonnes a year.

Pryor added that African Minerals’ wet season strategy was performing well, but that the company had suffered interruptions to its shipping during the third quarter of this year owing to major maintenance and operational issues with its contracted transshippers.

“As a result, we are lowering our sales guidance for 2013 to export between 11-million tonnes and 13-million tonnes of product, as opposed to a previous guidance that targeted between 13-million tonnes and 15-million tonnes. We continue to focus on bringing down the cash cost to our targeted $30/t level, which we expect to achieve by the end of the year as we increase our monthly volumes,” he said.

He added that the company was also working to redefine its Tonkolili Phase 2 expansion plans, with a focus on efficient capital investment and increasing returns }on investment.

“We currently aim [to ensure] that all capital requirements for Phase 2 will be met by available cash and existing debt facilities, plus new project-level debt.”

Meanwhile, African Minerals last week also announced that it had settled claims raised by Shandong Iron & Steel Group under the investment documents for its $1.5-billion equity investment in the Tonkolilli project companies.

The investment agreements with Shandong required delivery of two-million tonnes of iron-ore to Shandong in 2012, and contained guarantees that, during 2012, the project subsidiaries would sell ten-million tonnes of iron-ore and reach a production rate of 12-million tonnes a year.

“Although the project has now demonstrated achievement of its targeted 20-million-tonne-a-year export run rate as announced on June 18, 2013, production in 2012 did not meet the production guarantees and offtake obligations given to Shandong.

“In accordance with the provisions of the investment agreements and applicable laws, Shandong is to be compensated for these shortfalls, and for certain warranty breaches claimed following its postclosing audit,” African Minerals explained.