Market Report: London Mining hit by tumbling iron ore prices


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The Independent Online

The mining industry has had a tough time of it this year, but perhaps the most startling performance has been that of London Mining. The iron ore miner was changing hands at 113.5p at the beginning of January. Yesterday the shares were worth less than a penny.

London Mining has been hit by tumbling iron ore prices – at a five year low – and the Ebola outbreak, which has disrupted its operations in Sierra Leone. The company has also been caught up in a row over prepayments on contracts with the commodities giant Glencore, off 4.4p at 326.65p.

Numis Securities warned that it looked like the “end of the road” for the debt-laden miner. London Mining slid 2.35p to 0.75p.

The FTSE 100 lost a further 13.34 points to 6,482.24, close to marking fresh 2014 lows. The Engineer GKN slipped 10.7p to 294.7p after a downgrade from Bank of America Merrill Lynch. The bank has concerns about the health of the global car making and industrial sectors, with knock-on effects for GKN.

Tesco marked a second day of gains, up 2.5p at 185.1p, as HSBC said the recent scandals had been factored into its share price, adding that the “cultural change” at the supermarket looked positive.

Credit Suisse piped up in favour of ITV, joining the majority of analysts in the City in singing the praises of its studio business, which is behind hits such as Downton Abbey, and raising the possibility of cash returns to shareholders. ITV climbed 1.4p to 205.8p.

Construction and support services group Interserve was helped 22.5p higher to 610.5p by a note from Berenberg arguing that it was undervalued. And Lonmin added 2.7p to 173.2p as it said it had returned to full levels of production earlier than forecast. The South African platinum producer is recovering from five months of wage strikes.

On AIM, the West African oil explorer Lekoil, down 1.75p at 63.25p, put paid to rumours that it was planning a rights issue.

Pubs group Punch Taverns finally completed its long running debt restructuring, with 3.7bn new shares beginning trading. The dilution saw Punch slip 0.65p to 8.25p.