By Allieu Sahid Tunkara
Shandong Iron and Steel Group (SISG) Limited has promised to pay all outstanding debts accrued by the defunct African Minerals Limited (AML). But the Chinese company, which specializes in the manufacturing of steel and took over the Tonkolili Iron Ore project recently, has sent its first strong warning yet that it will no longer be business as usual for aggrieved creditors who use the country`s legal system to demand payment of their debts.
Shandong took over all of AML`s shares last month and the Chinese company was formally unveiled last week at a special conference held at the Raddison Blu Hotel at Aberdeen. The company inherited in the process a huge debt in the region of around US$40m due to local contractors and suppliers.
The announcement by Shandong promising to clear its debts follows calls by President Ernest Bai Koroma on the company to honour its financial obligations left behind by its predecessor.
Koroma, while addressing the Raddison Blu conference, appealed for immediate commencement of mining operations but also noted that payment of all debts to the local contractors and suppliers must be given a priority as their services were crucial to the smooth operations of the company. The president said his government could no longer wait since a lot depended on the mining sector for the country’s economic recovery.
“Shandong company must build on the solid foundations left behind by AML,” the president said.
Contractors and supplies, who are owed by the company, are divided over how to cliam their debts.
Paul Hinga Tucker, a representative of one of two factions of the local suppliers, told Politico that Shandong had demonstrated strong commitment to pay all debts owed by the UK-based company to the local contractors and suppliers and said talks were still on to ensure this happen in time.
“Negotiations with Shandong regarding payment are on-going,” the contractor said. He highlighted the detail of the engagement they had, as contractors and suppliers, with AML which led to the accruing of the debts.
“We have been supplying AML with rice, medicines, lubricants and other commodities worth US$40m and above,” Tucker said.
He said in a bid to engage in strong negotiations to get back their monies, they formed themselves into a group wherein they have held several discussions with Shandong. But he said some suppliers refused to belong to the group. Hinga Tucker explained further that these aggrieved local suppliers had taken AML to court for the company’s failure to pay them. He disclosed that AML owed this group of suppliers huge sums of money that run into million of dollars. He said the “litigant suppliers” had been telling him that their business transactions with the former Iron Ore miner was private and that they would only disclose the exact sum in court. Tucker sees the move by Shandong as positive and assured that he would cooperate with the company until their monies are paid.
“It is nothing bellicose against any authority as far as recovering our monies is concerned,” he said.
Gibril Bangura, a senior official in the Former AML said at last week`s conference that Shandong company was working very hard to clear all debts owed to the local contractors and suppliers. He referred to those local suppliers who took the defunct miner to court as ‘bad suppliers’ and said those who exercised restraint and engage in negotiations with the company were the ‘good ones’. He said Shandong would work with the ‘good’ suppliers when it would have cleared all its debts.
“Shandong Company would engage in business transaction with you the good ones who do not go to court,” he said.
Chinese Ambassador Zao Yanbo accused AML of mismanagement of funds which, he said, led to the closure of the mining operations. He said this situation compelled Shandong company, which was a 25% shareholder of the Tonkolili project, to take over full mining operations from AML company. But the Chinese diplomat was also harsh on those creditors who went to court over their pay.
He however assured that the coming of Shandong to Sierra Leone`s mining sector further cemented the bilateral relations between China and the West African country.
“China would stand strongly by Sierra Leone in her post Ebola Economic Recovery,” the ambassador assured.
© Politico 13/05/15
