Iron ore producer London Mining will continue to scale up production capacity at its Marampa project in Sierra Leone to generate 5Mtpa of iron ore in 2013.
The company has completed the required technical studies for expansion at the site, which is currently expected to produce 1.5Mt of iron ore concentrate for the full year.
Expansion is expected to entail an initial capital expenditure of $860m at an operating cost of $39 a ton for the first five years.
A further $550m investment after five years is projected to enable the plant to process unweathered primary ore for an extended 26-year mine life at $157 per ton.
London Mining chief executive Graeme Hossie stated that the production expansion at Marampa is progressing as scheduled.
"Our processing plant and logistics system are working to design, as we have ramped up during the first year of operations and we have successfully met a number of challenges during the wet season.
"The second plant construction is proceeding in-line with budget and planned timing of being in operation in Q1 next year and we maintain our production target of 1.5Mt of iron ore in 2012 based on performance improvements now taking effect in Q4," Hossie added.
The CEO said that the company is completing value engineering work to incorporate identified potential while seeking finance expansion beyond the 5Mtpa stage.
"This may involve the use of free cash flow from the 5Mtpa operation, debt, offtake related finance and/or the involvement of a strategic partner," Hossie said.
Image: London Mining is currently scaling up capacity at Marampa in Sierra Leone. Photo: London Mining Plc.