Bloomberg quoted Mr Graeme Hossie CEO of London Mining Plc, which began first production at its Marampa iron ore mine in Sierra Leone, as saying that it will be profitable 2012 and invest the cash to expand the project.

Hossie said that "No dividend is planned for 2012 because the value from reinvestment is extremely high." He added that the London based company is seeking to produce 1.8 million tonnes of iron ore in 2012 and expand the output to 4 million tonnes in 2013.

London Mining, which has a 5 year off take agreement with Glencore International Plc to sell 1.8 million tonnes a year of the steelmaking raw material, is targeting an annual output of 11.5 million tonnes in 2014 and 16 million tonnes in 2016. The iron ore developer will receive USD 27 million from Glencore at the end of January 2012 as part of the agreement.

Mr Roger Bell, an analyst at JPMorgan Chase & Co, wrote in a report that "This is a significant milestone which should be taken positively by the market." He added that the current share price undervalues the company's growth options.

Mr Hossie said that London Mining, which invested about USD 169 million until the beginning of production at Marampa, will need USD 65 million to expand the annual production to 4 million tonnes. The company also estimates an additional investment of about USD 660 million to reach a 12 million tonnes capacity.

Mr Hossie said that "We are talking to Glencore and a couple of other traders about a new off take agreement for the expanded production. The company is seeking to accelerate its expansion by receiving loans or prepayments from off take partners. When we reach 16 million tonnes production, I believe we'll have a mix of traders and steel mills as off takers."

(Sourced from www.bloomberg.net)