Centamin plunges as Egypt turmoil hits gold mine
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Wednesday 03 August 2011
The value of Centamin Egypt dived yesterday after the gold miner said it would produce less of the metal than expected because of the turmoil in the Middle East.
Centamin said the confusion in the wake of the toppling of Hosni Mubarak's regime earlier this year had caused it severe problems. In the weeks afterwards, blasting inspectors, who issue explosives and need to be on site when Centamin blows up the rocks at its mine in the country, showed up late, or sometimes didn't show up at all.
The result was that second-quarter production at Centamin came in well below market hopes – and forced it to warn production for 2011 as a whole would be 200,000-210,000 ounces, against the 250,000-290,000 ounces previously expected.
With the gold price soaring, the problem comes at the worst time for Centamin, though it believes the issues "will be resolved in the third quarter". Its shares closed at 109.6p, down 20.5 per cent, last night.
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