By Amin Kef (Ranger)
Marampa Mines Limited (MML), a significant player in Sierra Leone’s mining sector, has sent a crucial letter to the Hon. Minister of Mines & Mineral Resources, Mr. Julius Mattai, emphasizing the need for revisions to the Rail and Port Lease Agreement between the Government of Sierra Leone (GoSL) and Kingho. MML, under the leadership of CEO Craig Dean, has expressed concerns that the current draft of the lease agreement with Kingho could have adverse consequences for their operations and revenue generation, which would ultimately affect GoSL royalties and community development contributions.
In their letter, MML acknowledged Minister Mattai’s recent appointment and extended their commitment to working together to boost the country’s mining sector. They underscored the importance of guaranteed and unconditional access to the Pepel Rail and Port Infrastructure for exporting iron ore concentrate. MML has nearly completed a significant expansion project, which will be operational in January 2024 and increase their export capacity to approximately 4 million tons.
MML’s key concerns revolve around the ongoing negotiations between GoSL and Kingho for the Rail and Port Lease Agreement. They argue that the terms within their existing Mineral Lease Agreement (MLA) must be considered, as it grants them priority access rights and the GoSL’s commitment to ensuring their use of the infrastructure. These rights are crucial for MML’s long-term expansion plans, which are heavily reliant on access to the Rail and Port.
Specific clauses in their MLA highlight their rights, including a priority right to use the Rail and Port on “most favored customer” terms and a commitment from GoSL to facilitate their access. MML also maintains that their MLA provisions should take precedence over Kingho’s lease provisions.
In addition to their written concerns, MML recounted discussions with Kingho regarding access to the infrastructure, which left them apprehensive about not being granted access. Kingho even suggested that MML sell their high-grade iron ore concentrate to them, a proposition firmly rejected by MML.
MML’s concerns are detailed in a memo, which outlines necessary changes to the Lease Agreement with Kingho. Key recommendations include:
1. Reducing the lease duration from 20 years to 5 years to promote competition and accountability.
2. Requiring Kingho to grant access to third parties for up to 50% of the existing capacity.
3. Allowing a shorter notice period for shipment requests (1 month instead of 4).
4. Prohibiting Kingho from purchasing materials from other potential users of the Railway and Port.
5. Ensuring Kingho operates and maintains the Demised Properties according to best practices and international standards.
6. Mandating the use of the English language for all company documents.
7. Adding three new events of default for accountability.
8. Reviewing the lease agreement every 2 years and allowing for the introduction of another rail and port operator.
MML’s letter and memo highlight their commitment to ensuring a fair and competitive environment for all stakeholders, preventing monopolization, and safeguarding Sierra Leone’s mining industry’s future. The successful resolution of these concerns will be pivotal in ensuring the growth and profitability of the mining sector in Sierra Leone.
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