Gold miner Centamin suspends operations over lack of diesel

FTSE 250-listed Egypt-focused gold mining company Centamin has suspended operations at its Sukari gold mine because diesel has stopped being supplied.

FTSE 250-listed Egypt-focused gold mining company Centamin has suspended operations at its Sukari gold mine because diesel has stopped being supplied.

In an official statement made by the company to the London Stock Exchange, Centamin stated that it had received a "retrospective claim" for LE403m (approximately $65m) from the Egyptian General Petroleum Corporation (EGPC) for diesel fuel supplied from December 2009 to January 2012.

Centamin alleged that the claim was "illegal" and claimed that EGPC had refused to authorise future supply of diesel to the Sukari Gold Mine until the amount was paid.

It said that together with the Egyptian Mineral Resources Authority's support, Centamin has been seeking to have the fuel supplies reinstated. Discussions are "ongoing" but fuel supplies have reached "critical levels".

Unexpected setback on fledgling gold export business

The company has also faced a setback on its planned gold exports.

Having obtained necessary permission from the EMRA, it commenced the process of gold exports, but during the process, Centamin said that an unforeseen "arbitrary request" from customs officials for prior approval by the Minister of Finance halted the shipment. The company said that it had urgently sought the approval but had not yet received it.

"In light of these developments, it is with regret that, due to a resultant lack of diesel and a short-fall in working capital in Egypt for the local operations the decision has been taken to suspend operations at Sukari and to place the mine on care and maintenance until these issues are satisfactorily resolved," a company statement read.

"Centamin will take vigorous action to defend its rights to continue the extraction and export of gold from the Sukari mine, to obtain fuel supplies and to challenge the illegal retrospective claim from EGPC."

MF

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Most Popular

Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
Inflation is the easiest way out of this – just don’t expect politicians to admit it
Inflation

Inflation is the easiest way out of this – just don’t expect politicians to admit it

The UK government borrowed £34.1bn in December, a record amount for that month. Britain's debt pile now amounts to 100% of GDP. How are we going to pa…
22 Jan 2021
The world’s fund managers are getting very bullish – be careful out there
Stockmarkets

The world’s fund managers are getting very bullish – be careful out there

The latest survey of fund managers shows them to be extremely bullish on all the same things. And that, says John Stepek, means the market is in dange…
21 Jan 2021