By Amin Kef Sesay
On the 10th May 2021 the Government of Sierra Leone and SL Mining Company disclosed that a Memorandum of Understanding has been signed by the two parties bordering on an out of court settlement geared towards putting behind them thorny issues that led to a costly arbitration when SL Mining Company took legal recourse against the Government of Sierra Leone in London.
The two parties have in a Memorandum of Understanding agreed on an out-of-court settlement aimed at resolving the issues between them.
It must be recalled that there was an existing impasse between the two parties which culminated in the Government of Sierra Leone cancelling the mining license of SL Mining Company for allegedly breaching its mining lease agreement.
In a Press Release issued by the Ministry of Mines and Mineral Resources dated 10th May 2021 and signed by the Minister, Musa Timothy Kabba, it was categorically stated that following lengthy discussion and negotiations, the matter between the Government of Sierra Leone and SL Mining Ltd/Gerald Group has been amicably resolved in the best interest of the people and Government of Sierra Leone and SL mining Ltd/Gerald Group.
The Release continued that members of the public could recall that in 2019 the Government of Sierra Leone cancelled SL Mining’s license on sundry grounds which resulted in the closure of the mines.
“In the spirit of the resolution both parties in the dispute have dropped their respective claims,” the Press Release furthered adding that a new company will be formed and a new mining lease agreement negotiated to ensure greater benefits for the people of Sierra Leone.
The Mines Ministry maintained that it wishes to use the opportunity to assure all employees that Government will continue to work with the new company to ensure that all Sierra Leonean employees and service providers of SL mining/Gerald Group are not disadvantaged in any way.
Based on what this medium understood the binding agreement was signed by both parties on the 7th May, 2021. It was further learnt that in the spirit of the resolution, SL Mining / Gerald Group and the Government will withdraw their respective legal claims or allegations under both ICC and ICSID arbitrations, and both Gerald and the Government will provide full support to ensure a rapid commencement of mining operations.
The negotiated amicable out of court settlement entails broadly the following terms amongst others: All legal cases and /or allegations between the parties will be indefinitely withdrawn.
A new company will be formed wherein Gerald Group will own 90 percent interest and the Government will own a 10 percent non-dilutable interest.
The new company will take over all assets and rights of SL Mining, which include Marampa North, Marampa South, and all property plant and equipment.
Gerald has committed to increase materially the production of Marampa.
The new company will commence operations by 1st of June 2021 and Gerald will have the immediate right to ship the current stockpile, which is 707k tons of iron ore.
Gerald will pay a fixed sum of USD 20 million in two instalments of USD 10 million prior to 31 December 2021.
The new company will negotiate during the course of May 2021 a new Mining Lease Agreement that will be a win-win for the Government and Gerald.
Craig Dean, Gerald Group’s Chairman and Chief Executive Officer, stated, “I am delighted that we have been able to resolve our differences and have a fresh start and new beginning with the Government of Sierra Leone. I would like to thank His Excellency, President Bio, for personally working with me and the team to resolve this longstanding situation in the best interests of the people of Sierra Leone, the Government, and the Gerald Group / SL Mining. We look forward to a positive long-term working relationship.”
It was understood that the CEO of SL Mining Craig Dean, Minister of Information and Communications, Mohamed Rahman Swaray, Attorney General and Minister of Justice ,Anthony Brewah, and Mines Minister, Timothy Kabba, all expressed delight at the peaceful resolution.
According to a school of thought this is good news for Sierra Leoneans as it expected that when the company resumes operations soon it will create thousands of jobs and positively be contributing to overall national development through the payment of taxes.
SL Mining is a wholly-owned subsidiary of Gerald International Limited, which is the holding company for all entities in Gerald Group.
The Group is one of the world’s leading commodity groups, and the oldest and largest employee-owned metals merchant in the world. SL Mining restarted production at the Marampa Project after 4 years, following earlier failed attempts by other international companies. SL Mining began marketing and shipping premium grade 65% iron ore concentrate to steel miles in China in June and July 2019 from the Marampa Project.
It is stated that Gerald Group aims to contribute to world trade and economic development in a sustainable and responsible manner. Founded in 1962 in the United States, the Group is the world’s oldest and largest independent and employee-owned metals trading house Headquartered in London.