Gerald group wins back its iron ore mining rights in Sierra Leone

Sierra Leone Telegraph: 11 May 2021:

After two years of costly court action between the government of Sierra Leone and the owners of SL Mining, Gerald Group, both sides yesterday met in Freetown where they signed an agreement ending the dispute which would allow SL Mining to resume iron ore mining operations in Lunsar, northern Sierra Leone next month.

The dispute started soon after the ruling SLPP party won elections in 2018 and took action to suspend, and in most cases cancel a wave of mining agreeemnts signed by the previous government, including SL Mining operations, leading to the seizure of the company’s assets by the SLPP government.

Since then, a multi-million-dollar lawsuit filed by the Gerald Group at the International Arbitration Tribunal has proved costly for the government, who has also seen its mining revenue which accounts for over 40% of government revenue fell by over 30% in the last three years.

Yesterday’s out of court settlement of the government’s dispute with the Gerald Group should start to see the return of some confidence in the government by foreign investors. (Photo: Attorney General Brewah – sitting far right, as mining minister Timothy Kabba signs agreement).

A report coming out of the government’s Strategic Communications Unit yesterday said:   “The Government of Sierra Leone and SL Mining have in a Memorandum of Understanding agreed an out-of-court settlement aimed at resolving the issues between them.This disclosure was made today, 10th May 2021, at a  meeting held at Tokeh Resort  between the two parties.

“The out-of-court settlement has been done in the best interest of the company and the country as the MoU seeks to ensure a win-win situation. The stalemate was as a result of Government’s cancellation of the Company’s license for alleged breach of its mining lease agreement.

“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.

“This is good news for Sierra Leoneans with the company expected to resume operations soon, thereby creating thousands of jobs and also contributing to the growth of the economy through the payment of taxes.”

So what are the terms of the agreement?

According to a statement received by the Sierra Leone Telegraph from the company last night:  “All legal cases and /or allegations between the parties will be indefinitely withdrawn; a new company (“NewCo”) will be formed wherein Gerald Group will own 90 percent interest and the Government will own a 10 percent non-dilutable interest;  NewCo 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; NewCo to begin operations by 1st of June 2021; 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;  Gerald / “NewCo” will negotiate during the course of May 2021 a new Mining Lease Agreement that will be a win-win for the Government and Gerald.”

The company’s statement also says that: “Gerald Group (“Gerald”), the world’s largest independent, employee-owned metals trading house, is delighted to announce that the long-standing dispute between the Government of Sierra Leone (the “Government”) and SL Mining Limited (“SL Mining”) / Gerald Group (“Gerald / the Group”) has been amicably resolved in the best interests of the people of Sierra Leone, the Government and SL Mining/ Gerald Group. A binding agreement was signed by both parties on Friday, May 7, 2021. In the spirit of the resolution, SL Mining / Gerald Group and the Government will withdraw their respective legal claims / 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.”

Mr. 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 long-standing situation in the best interests of the people of Sierra Leone, the Government and Gerald Group / SL Mining. We look forward to a positive long-term working relationship”.

Last night, the government’s ministry of information and communication published a press notice inviting the media to a press conference taking place in Freetown at 10am GMT (9am local time) today to discuss the government’s agreement with the Gerald Group. The conference will be televised live on national TV.

You can read the full statement by Gerald Group here:

https://slmining.com/2021/05/10/government-of-sierra-leone-and-gerald-group-announce-the-signing-of-a-settlement-agreement-for-sl-minings-marampa-project/

8 Comments

  1. This is what happens to a government that failed to do due diligence before they embark on such reckless behaviour. We should all know, once you sign a contract, you have to honour it. Although there might be disagreements later on, common sense dictates, just by talking and airing out your grievances, and trying to reach an amicable agreement, is to the best interest of all the parties concerned. It is important to take not of the rules governing dispute resolution. And in the event of one party breaking the terms and conditions of the contract, where such cases should be heard, and under which jurisdiction.

    Since we are dealing with international investors, it is always safe to assume that the party involved in a dispute with the Sierra Leone government will always ask the case to be heard internationally, or in their country of origin. And these international players will always ask their governments to step in by applying diplomatic pressure on our government to come to a swift resolution. Now we have the double whammy of our government paying out court costs to the mining company concerned, also incalculable amount of lost income, whilst the government was busy fighting the company in the courts. I hope the government lawyers that were involved in this fruitless exircise, reimburse the state. You can’t run a country with an ego.

    And this mining company was not the only company that fell foul of Bio’s misguided economic policies. He might have thought he is saving the state much needed funds, but now we have lost. Mr president the only way you will save our country money, is by tackling corruption. Bio gambled with the family silver and he have lost us everything. Internationally we have lost our reputation as a safe destination for would be foreign investors. When one says Sierra Leone is open for business, foreign investors will think carefully before they sign any future contracts with this hopeless government.

  2. Folks here is a simple equation that explains this whole fiasco —INEPTITUDE plus ARROGANCE equal to DISASTER. For almost 2 years, after millions of dollars lost in government revenues, along with the hundreds of Sierra Leoneans left unemployed by a STUPID decision to cancel out a mining contract arrogantly without due process of the law, we are now back to square one. It appears some of these PAOPA extremists have experience an epiphany.

    Government being a continuation, if the prior regime signed a contract with an investor, and the terms of agreement are not palatable to you, common sense dictates, you invite the other party, explain your concerns, and do everything to get a renegotiation of the contract. Ironically, our PHD holders in the PAOPA who walk around boasting of all the academic achievements in the world, could not reach to such a simple logic reasoning.

    It appears their lawlessness and thuggish mindset have engulfed all their rational reasoning, opting out instead to abruptly terminate a business contract. Now having lost a court case and much humiliation at the international court of commerce, with a threat of having to pay millions to SL mining, they cowardly come to their senses again. At the end, it was much about nothing, other than causing untold suffering for hundreds of Sierra Leoneans whose employment by SL mining was a life line. Stupidity at the highest degree!!

  3. As I see it Sierra Leone has once again been duped by a group of white people to confirm the baseless and demented notion/theory that Africans are stupid. Where did our negotiators have their respective heads situated? Surely not on top of their shoulders. Yes, your share of what you own is just 10 percent. This equals to nothing because the clever white man will ship away the iron ore, process it and sell the finished product back to you at a price which eats up the so-called 10 percent that he gave you.

    This is just an opener which I have to end with two questions: What was it that the Bio government found so obnoxious about the contract signed between the Koroma government and SL Mining? The public has a right to know in order to make an educated judgement. Secondly, is there any provision in the new agreement which clearly stipulates that in time some of the iron ore will be sold to the Sierra Leone government when it develops its own iron ore processing plant? I think the only remarkable thing about the new agreement is seeing the protruding stomach of the attorney-general, which is one and half the size of that of his boss – the president.

  4. Congratulations to the New Direction government, the citizens especially the people of Lunsar and the management of the Gerald Group. Negotiation is all about give and take which always result to a win win situation for both parties. This is also an early Eid (Prayday) gift. May the Almighty continue to bless “Mama Salone”.

  5. From what I read from the agreement signed, I believed that, it is the Government of Sierra Leone that has won from all indication. For example, the old terms in the previous lease agreement is terminated, and the SL mining is also terminated, giving way to a Name called “NewCo”. This simply means that everything, including and lease arrangement that has to do with SL Mining is terminated. Most of all, the Sierra Leone government will have to receive USD$20,000,000 after shipping the stockpile of Iron ore at the site. The headline of this news is completely wrong.

    • “The headline of this news is completely wrong”. Mr Koroma can you tell us how is the headline completely wrong? Did the government and Gerald not say that Gerald will commence mining next month, a right that was taken away from Gerald by this inept Paopa government? Geeeez, whats so hard about this to understand. Free quality education in Salone my foot. So called educated men can’t understand simple English. Lol

  6. And there you have it folks – exactly what I said will happen is now the end result of Years of their poor thinking, incompetence and SLPP buffoonery. Now you can all feel at ease to call me a “Prophet” because my words have come to pass; the darkness has been overthrown by the power of light. It seems to me Gerald group have been reading the SIerra Leone Telegraph for inspiration on this matter – I advised that they should not throw in the towel but stand firm and refuse to yield and victory will be theirs. And as sure as today’s sunrise staring me in the face – my heartfelt, pragmatic words have come to pass.(lol)

    Gentlemen in the SLPP, this is exactly why we have always maintained that you guys are unfit to rule Sierra Leone; the ability to foresee the outcome of events is totally missing in all your shadowy acts of arrogance, intimidations and empty, foolhardy rhetoric. You guys represent everything that is wrong with our country – Your stupidities have been exposed to a progressive global world that believes in fairness, kindness, sincerity of purpose and integrity.(lol) Hurray for the good people of Sierra Leone…Hurray for Equity and diligence and the Rule of Law.

  7. They are not going anywhere and have proved it without doubt. They own the rights to mine and will move earth to do just that. You guys are not fit to govern as you are filled with hate and envy. Bravo Gerald Holding.

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