By Amin Kef Sesay – 18 August 2019
One of the campaign promises of President Julius Maada Bio was to attract genuine and legitimate investors and to negotiate fair and better deals that will be benefit the people of Sierra Leone.
He also constantly emphasized on a win-win situations for both the people and the investors who would be investing in the country.
The recent stand off or for want of a better expression chicanery by Sierra Leone Mining and the robust position of the government of Sierra Leone is another demonstration of the Bio led administration’s commitment to sanitise our mining sector, bring benefits to the people and resist fleecing and extortion by some so called investors.
According to the Mining Lease Agreement of 2017, between the GoSL and Sierra Leone Mining, the latter was to pay $1,000,000 (One million dollars) as performance bond to the former. It is a shock for any reasonable person now to hear the company denying knowledge of any such arrangement when there are documents to the effect.
This does not only show the deceitful nature of the company but also an attempt to circumvent rules as stipulated in their contract with the GoSL.
Fact On Arms Length Sales And Advanced Pricing
Arms-length sales terms is a clause in the Mines and Minerals Act of 2009 that gives powers to government to know tonnage (quantum) of export, destination, buyer and price of minerals being shipped from Sierra Leone (advanced pricing).
This allows government to do proper calculation of royalties and other financial obligations by any company in order to determine what financial inflows go to the GoSL from the sale of its precious minerals.
In the recent past, government has activated this clause in dealing with SLM in order to maximise its benefits from the shipments made so far in June and July, the company has recoiled and refused to cooperate.
False Declarations By SL Mining
SLM after realising that government is insistent on going strictly by the terms of their contract and the MMA of 2009, embarked on false declaration and deceit. It has given fictitious figures as prices of iron ore, and made false declarations to the Ministry of Mines and Mineral Resources about the destination of the ore shipped in June and July this year.
At a time when the world market price of iron ore was going for $123 per tonne, SLM had the effrontery to tell GoSL it sold its Marampa blue ore at $78 per tonne. But that was not the end of the deceit game of SLM. When pushed by GoSL as to who they sold the ore to, they mentioned a subsidiary company of theirs, which in turn sold to a third party company in China at the world market price.
This in effect means they got the ore and sold to themselves at a cheaper price than the world market price, declared the undervalued sales to government, and then made 100% profit by selling to the third party.
By their own calculations, GoSL was only going to receive about $330,000 (three hundred and thirty thousand dollars) from the Marampa Blue ore shipments of June and July. Government kicked against the entire paltry payment they wanted to make to it, and instead gave them calculations based on existing world market price at the time, which could have fetched them (SLM) about $22M with government getting at least $630,000 (six hundred and thirty thousand dollars). They rejected it and have now gone on a campaign of calumny against the government of Sierra Leone.
No Right To Assets
According to Sierra Leone Mining’s contract of 2017, the company was only given mineral rights at Marampa, but never given rights to the assets they met on ground, which were owned by Timis Corporation, its predecessor company that was owned by Frank Timis but went into liquidation. SLM was to enter into a phased payment plan for the mines assets, according to section 54 of the MMA of 2009, but reneged on this clause. The mines assets had been valued by GoSL at $16M (sixteen million dollars) and SLM was to enter a payment plan of the said sum, but refused to.
Taxes and Other Dues
According to calculations done, SLM owes the government an estimated $2.9M (two million nine hundred thousand dollars) from taxes and other duties, since they started operations in 2017.
In the midst of all of these breaches and violations of the laws of the land and their contract, government has asked for a meeting with SLM by September 30, for a review or renegotiation of their contract. They have refused that offer and instead taken a confrontational posture against government using blackmail and threat of legal action.