Centamin sinks as it suspends its Sukari mine

SHARES in Egyptian-focused miner Centamin lost almost half their value yesterday, as is said it would close its flagship asset following a dispute over diesel supplies.

The FTSE 250 firm said yesterday that it had received a claim from Egypt’s national oil company for around $65m (£40m) in back payments for diesel fuel supplied from December 2009 until January 2012. Centamin argued that the claim was illegal.

As a result, the Egyptian General Petroleum Corporation (EGPC) has stopped all diesel supplies to the Sukari gold mine until the amount is paid.

Discussions are ongoing, but fuel supplies have reached critical levels, Centamin said.

Additionally, an “unforeseen and arbitrary request” from customs officials has halted gold exports, pending an approval from Egypt’s finance ministry.

“Due to a resultant lack of diesel and a shortfall in working capital in Egypt for the local operations the decision has been taken to suspend operations at Sukari,” Centamin said yesterday, which sent its shares to a seven-year low.

Shares in the gold miner are still recovering from losing a third of their value in October, when an Egyptian court said that the company’s right to mine gold in the country was invalid.

Shares closed down 47.44 per cent at 27.7p yesterday.