By Allieu Sahid Tunkara
Shandong Steel Group(SISG), a leading Chinese company specialized in iron and steel production, has disclosed plans to resume the Tonkolili iron ore mines after they took over from African Minerals in April, 2015.
The company’s vice chairman, Mr Wu Chu, yesterday told the unveiling ceremony at the Radisson Blu hotel in Freetown that they would focus their attention mainly on the Tonkolili Iron Ore mining project with the largest deposits of iron ore in the country.
“We will soon start construction on the project site to immediately resume iron ore production,” he assured and informed the audience that one of the main challenges facing the company was the fall in the iron ore price on the global market but that they would work very hard to overcome those challenges.
“We will sustain operations of the company through excellent technology and scientific management,” he said, adding that the takeover of the Tonkolili Iron Ore mining project would renew the strong ties between China and Sierra Leone.
Giving an overview of the mining sector, the Minister of Mines and Mineral Resources, Minkailu Mansaray, told the audience that the former iron ore miner, African Minerals Limited (AML) commenced active operations in the country in 2007 with the first shipment of the ore in 2011.
He said throughout that period the company was engaged in smooth iron ore operations, contributing immensely to the country’s economy before the global drop in ore value. This situation, he went on, created a shortage of working capital that eventually led to the closure ofiron ore mining in the country.
“Since the company closed down, my ministry engaged in serious negotiations with relevant stakeholders for sustained funding for the resumption of the iron ore mining,” he said.
Minister Mansaray further explained that Shandong, which he said was a 25% shareholder of iron ore business in the country, was playing a crucial financial role for the survival of iron ore mining operations.
Director of the National Minerals Agency(NMA), regulator of the mining sector, Sahr Wonday, told the audience that the closure of the mines was an issue of grave concern among the public because of its dire consequences on the economy.
He said the closure caused a big, negative impact on the global iron ore industry, adding that since an agreement had been reached between AML and Shandong with the latter being a 100% shareholder, he expressed hope that the country would soon start to enjoy the high gross domestic product(GDP) growth rate which it enjoyed between 2011 and 2013.
He assured the audience that Shandong Steel Group Company would definitely enjoy a comparative cost advantage in the iron ore mining sector and that the company would create job opportunities for sierra Leoneans.
“Full support and cooperation would be given to the company as long as it operates within the legal and policy framework of government,” Mr Wonday said.
In his keynote address President Ernest Bai Koroma said the resumption of iron ore mining by Shandong was a fundamental turning point in the problems the mining sector was experiencing.
He said AML was seriously affected by the outbreak of the Ebola virus and that that forced the company to close down operations in the country.
“The mineral sector has been an engine of economic growth as it contributed significantly to national revenue,” he said, adding that it was in this direction that he had to put in place the appropriate legal and policy framework since 2007 to ensure equal benefit for all Sierra Leoneans.
He said the Tonkolili Iron Ore project accounted for 40% contribution to government’s revenue and urged the new company to build on the foundations laid by the former iron ore miner.
“In spite of the increasingly volatile situation of the mining sector, I have confidence in the sustainability of Shandong as the company has its own steel manufacturing facilities,” he stated. Making reference to the local content policy, President Koroma called on Shandong to comply with the relevant laws of the mining sector, create jobs for the youths, build their capacity and improve the livelihoods of the communities where they operate.
The Chinese Ambassador, Zao Yanbo, said AML closed operations owing to mismanagement of funds, a situation he said had compelled Shandong to stand up in those crucial times to continue operations.
He said the company was among the 20 leading steel companies in the world it was reliable and competitive.
He also told the audience that the Ebola outbreak would soon be over and that the attention of government should now be shifted to the post Ebola economic recovery strategy for the socio-economic development of the country. He said China would stand strongly by the government to achieve that goal.
Shandong Iron and Steel Group was established on 17th March,2008 as a production base of efficient and high quality of iron products. It came into existence out of the restructuring of Jinan Iron and Steel Group, Laiwu Iron and Steel Group Company and Shandong Metallurgical Industry Corporation.
© Politico 07/05/15
