By Umaru Fofana
Former foes, US-based Gerald Group and the Government of Sierra Leone, have buried the hatchet and agreed that iron ore mining will resume in Lunsar in June.
This comes almost two years since the mines there were closed following the cancellation of the license of SL Mining on allegations of breach of agreement and law, which the company denied and went to court to disprove.
Under the new Memorandum of Understanding, SL Mining no longer exists and its owners, Gerald Group have established a new company called MARAMPA MINES.
Craig Dean, the CEO and Chairman of Gerald Group and of the now-former SL Mining, said the moment was historic. Speaking to Politico at the tourist resort at Tokeh, Dean said the negotiations resulted in “an amicable settlement that we are all blessed to have…because with the iron ore prices as high as they are, it affords us the possibility to reconcile things very reasonably for all parties”.
He said that in principle they’d allowed the government to have a free-carriage stake of 10% in the new company “which we think is very fair and reasonable”.
He said the government had agreed that Gerald Group should ship the stockpile of ore at the Marampa site, and with the estimated value of that the government would get $ 20 million paid in two tranches this year.
This, Dean said, was “far greater than any taxes and royalties that would have been due from the past”.
He said: “We are very excited that we can get the community and the people back to work”.
As part of the settlement all litigation emanating from the cancellation of the SL Mining license has been dropped without any payment or consequence to Sierra Leone.
Beaming with smile, Minister of Mines and Mineral Resources, Timothy Kabbah said the deal had ended years of acrimony.
He said it followed the setting-up by President Julius Maada Bio of a negotiating team.
“The end of negotiations has brought so many goodies for the people in that a new company will now be installed and that company will have 10% free carriage non-dilutable interest in favour of the people of our country”, Kabbah said.
“The president is keen on managing the natural resources in the most efficient and effective way for the benefit of the people of this country”.
He said the new Marampa Mines company would come into operation in June this year after the lease agreement would have been ratified by parliament.
“This will be good for job-creation and for revenue-mobilisation for the state”.
Reacting to the new deal, former mines minister Foday Rado Yokie who cancelled the SL Mining license, said the old agreement was “a bad deal”.
When he was sacked at the time, without reason, there was speculation that it had to do with the termination of the SL Mining license.
“I feel vindicated now because this was what I wanted for my country”, Yokie told Politico.
He had served as minister for a year before he was removed in July 2020.
The new deal comes as the global price of iron ore keeps soaring.
Meanwhile the lead civil society group on mineral resources in the country has welcomed the new deal. In a statement the National Advocacy Coalition on Extractives (NACE) says it is “impressed with the recent developments in which dialogue was finally chosen over litigation”.
The organisation however reiterates that it “seeks the interest of Sierra Leoneans, especially those affected by companies operating in the extractives sector”, and assures that it will “remain vigilant to monitor the outcome of their mutual agreement in terms of the newly forged relationship” between Gerald Group and the Government of Sierra Leone.
It calls for an MoU “with tracking tools and systems based on the mutually agreed arrangements, knowing that despite its position, Sierra Leone remains to be the owner of its natural resources”.
It says the country and its people must therefore share in the benefit of the country’s resources “while ensuring that companies operate and make profits”.
Such an MOU, the statement says “must be binding to the parties and must be covered by the laws of Sierra Leone and those of the home country of the company”.
It notes that “out of conflict may emerge new opportunities and growth”, and calls for further clarification on the formation of a new entity, while urging the parties’ commitment to Sierra Leoneans.
NACE urges the new company to address issues of liabilities inherited from SL Mining, “which is leaving behind taxes, remunerations, rents and others”.
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