London :  Iron ore firm London Mining is due to swing to profit next year after it launches production at its flagship mine in Sierra Leone, its chief executive said yesterday.

The London and Oslo-listed company will be able to pay fully for building its Marampa mine in Sierra Leone with its cash balance of $205 million (Dh752.35 million), Graeme Hossie said.

"We have the financing in house to deliver all of our objectives at Sierra Leone and for that to become a cash cow for us," he told a conference call.

"It will be profitable and cash-flow positive from the first month of exports which is the beginning of the second quarter next year."

He said the group, which listed on London's AIM market in November, would swing to profit next year after posting a net loss of $34.4 million for 2009.

The first phase of the Marampa mine will produce 1.5 million tonnes of iron ore per year at a cost of $85 million. Another $40 million is due to be spent from the cash flow of the mine to double output.

The company, which aims to produce 25 million tonnes of iron ore per year by 2015, is in discussions with potential partners for its next project, Wadi Sawawin in Saudi Arabia.

The 50-per-cent owned project is due to cost $1.6 billion to launch 5 million tonnes of annual output.

"We are already in discussions with offtake partners in Saudi Arabia who have expressed a desire to effectively arrange significant debt finance and government finance as well as an equity piece to bring that project to fruition," Hossie said.

"We don't expect to raise further capital ourselves to progress that project."

London Mining is seeking a strategic partner for its Isua project in Greenland, which has been estimated to cost $2.3 billion to produce 10 million tonnes per year.

Hossie said he was hoping to whittle down the capital expenditure for Isua by around 30 per cent during the year.

The company also has a 50 per cent stake in China Global Mining Resources, which owns the Xiaonanshan iron ore mine.

The move into China, the world's biggest consumer of iron ore, was strategic and has already shown results as London Mining has been invited by China to participate in a venture in Chile, Hossie added.

London Mining shares, which have gained 27 per cent this year, fell 0.4 per cent to 267 pence yesterday, largely in line with the UK mining index.