By Kemo Cham
A major partnership deal between Sierra Rutile (SRL) and the International Finance Corporation (IFC) has been inked on Monday.
The US$60million equity investment, which is geared towards the expansion of SRL’s operation, gives IFC a 10% stake in the company which mines the Titanium mineral, otherwise called Rutile.
Details of the agreement indicate that the investment will help the company doubles its rutile production from the current 150,000 tons per year and extend the life of its mine to at least 2035.
IFC is a member of the World Bank Group and it is its private sector funding arm. A statement from the Bank said the deal will also help increase SRL’s positive impact on the local communities where it operates, create jobs and improve on the national economy.
Rutile is one of the top two mineral foreign currency earner for Sierra Leone, alongside diamond and iron ore. And Sierra Rutile has been the leader in the production of the titanium mineral which is primarily used as a feedstock to produce whitening pigment for paints, plastics, and paper.
Sierra Rutile Limited, formerly a subsidiary of the British-owned Titanium Resources Group, was wholly acquired by the Australian sand miner Illuka in 2016 as part of a major takeover involving £ 215 million.
Sierra Rutile primarily holds leases for mining rutile in the country since its formation in the 1970s. These leases cover a land area of 580 km2, comprising some 19 identified deposits.
The company’s concessions span five chiefdoms in two districts: Imperi and Jong chiefdoms in Bothe; Lower Banta, Upper Banta and Bagruwa chiefdoms in Moyamba.
According to the company, the planned expansion is to be carried out in two of its operational areas: Area 1 in Gangama and Lanti in Bonthe, where it is operating a dry mining, and Area 5 in Sembehun, Bagruwa Chiefdom, Moyamba District.
With the signing of the deal, IFC is expected to immediately make an initial investment of $20 million to fund existing operations of SRL, and then a further $40 million to support the actual expansion plans.
“Partnering with IFC will provide benefits to Iluka, IFC, and the people of Sierra Leone by promoting the continued, sustainable development of the Sierra Rutile operation," Tom O’Leary, Managing Director of Iluka, said in a statement at the signing ceremony held at the Radisson Blu Mamy Yoko Hotel in Freetown.
SRL prides itself as the largest tax payer, private employer, and foreign exchange earner for Sierra Leone. But it has also come under criticism over the impact its operations have had on the local communities where it operates.
Campaigners opposed to its operations cite its social and environmental implications on the communities, including destruction of water sources and farmlands.
But the IFC says part of the objectives of this new deal is to prevent such negative impact on the local communities and that the expansion plans have been designed to comply with its Performance Standards.
According to the World Bank statement, a three-year advisory services agreement between IFC and Sierra Rutile will help the mining company implement a new community investment and engagement strategy, improve the transparency and use of community-managed mining revenues, and develop a women and youth social and economic empowerment program.
“The partnership with Iluka and Sierra Rutile Limited also demonstrates IFC’s continued commitment to fragile states and those recovering from conflict,” the statement said.
“IFC’s investment in Sierra Rutile Limited highlights our long-term commitment to the private sector in countries recovering from conflict and has the potential to generate thousands of local jobs and millions in government revenues,” Lance Crist, IFC’s Global Head of Equity, added at the signing ceremony.
© 2019 Politico Online
