Ebola Outbreak Affecting Mining in Africa
October 17, 2014
The deadly outbreak of the Ebola virus, which has claimed over 4,500 lives in Sierra Leone, Guinea and Liberia, is also having an impact on mining operations in Africa. Debt-laden mining company London Mining, who are in the process of looking for a buyer since they stopped trading shares on October 10th, warns that the outbreak could cost it an addition $1 per ton of iron ore produced.
The cash-strapped company has been operating in Sierra Leone since 2005 and has led efforts to help combat the Ebola crisis. The company employs 1,400 people at its iron ore mine in Marampa and is currently building a 130-bed Ebola treatment center near Lunsar.
Dan Desjardin, London Mining's managing director told the Guardian newspaper, "We are part of this community and this nation. A strengthened healthcare system is essential to safeguarding the health of our employees and our host communities".
Fears have been rising about the health of the London Mining staff in Sierra Leone, especially if the mine ceases operations, which is quite likely if a buyer cannot be found in time. Currently, London Mining is one of Sierra Leone's biggest employers and contributes roughly 10% of the nation's GDP.
The company insists it is not giving up on Sierra Leone and will stand by until the situation is resolved.
Russell Downs, joint administrator and partner at PwC told the Guardian, "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".
Liberian finance minister Amara Konneh said that the Ebola outbreak has, "Seriously affected economic activities and livelihoods throughout the country with domestic food production, mining activities, hospitality industry and transport services all declining".