Government of Sierra Leone ordered to rescind its decision to terminate SL Mining contract

Sierra Leone Telegraph: 19 February 2020:

As the economic downturn in Sierra Leone continues to worsen, questions are being asked about the government’s rationale for terminating or suspending mining contracts that have in the last few years, helped in boosting export revenue and GDP, especially as the government is now proving to be unsuccessful in attracting new investors to take over those mines.

Although many of the country’s mining agreements with foreign companies were badly drawn up and in need of serious review, the current government’s decision to terminate or suspend those agreements in an unstable and uncertain global economic climate, is seriously hampering efforts to rebuild the country’s economy and attract new investors. In short, investors are staying away, afraid of losing their investments in Sierra Leone.

This is now being compounded by yesterday’s press statement published by SL Mining, whose mining agreement negotiated with the previous government has been terminated by the new government, for which the company has taken legal action that may well prove to be highly costly to the government and people of Sierra Leone.

“Following the purported cancellation of SL Mining’s Licence, the ICC Arbitral Tribunal issued an order on 25 November 2019, which the Company has described in a Statement dated 27 November 2019. The Government failed to comply with that Order and instead aggravated the dispute with SL Mining.

“The Government’s non-compliance and aggravating misconduct has led the ICC Arbitral Tribunal to issue, at SL Mining’s request, a Peremptory Order on 13 February 2020 in which the Tribunal: Ordered the Government to rescind the purported cancellation of SL Mining’s Licence or otherwise to reinstate it. Declared that the Government failed to comply with the ICC Emergency Arbitrator’s orders dated 30 August 2019, 8 September 2018, 4 October 2019 and 9 October 2019. Declared that the Government failed to comply with the ICC Tribunal’s interim order dated 4 November 2019.

“Ordered that, until ordered otherwise and pending the final resolution of the dispute by the Tribunal: The Government lifts any prohibition on shipping or export of minerals directed at SL Mining; The parties continue to comply with their obligations under clause 6.9(d) of the Large Scale Licence Agreement between the Government of Sierra Leone and SL Mining Limited dated 5 December 2017; The parties refrain from aggravating and take no steps to aggravate the dispute between them.

“The Government shall refrain from: removing, dealing with, or otherwise interfering, directly or via third parties, with SL Mining’s assets, including equipment and stockpiles of iron ore, in relation with SL Mining’s Marampa iron ore project; directly or indirectly operating itself, or allowing third parties to operate, the Marampa Project; taking any steps towards the issuance of a mining licence and/or entry into a mining lease agreement relating to the Marampa Project or any part thereof to and/or with a third party; and otherwise altering the status quo as of immediately before receipt of the letter purportedly cancelling the Licence.

“Declared and ordered that the ICC Emergency Arbitrator’s orders continue in full force. Ordered the Government to comply with the ICC Tribunal’s orders within 8 days of the Peremptory Order,” dsays SL Mining in its statement.

This is the full statement published yesterday by SL Mining:

18 February, 2020 –  Lunsar, Sierra Leone and London, UK: SL Mining Limited (“SL Mining” / “the Company”), a wholly owned subsidiary of Gerald International Limited, issues this press release in order to protect its legitimate interests and place third parties on notice.  This release relates to the ICC Arbitral Tribunal’s Peremptory Order dated 13 February 2020 and the binding restrictions placed by the Tribunal upon the Government of Sierra Leone (“Government”) in respect of SL Mining’s Marampa Project, assets, stockpiles and equipment.

SL Mining is pursuing legal action, including ICC Arbitration, against the Government of Sierra Leone as a result of the Government’s unlawful conduct and non-compliance with the binding decisions reached in international arbitration. In the Company’s Statement of 8 October 2019, SL Mining confirmed that the Government had, by letter received on 7 October 2019, purported to cancel SL Mining’s Large-Scale Mining Licence No ML 01/2017 relating to the Marampa Project. This purported cancellation was unlawful and invalid and was contrary to the binding orders of the ICC Emergency Arbitrator.

Following the purported cancellation of SL Mining’s Licence, the ICC Arbitral Tribunal issued an order on 25 November 2019, which the Company has described in a Statement dated 27 November 2019.  The Government failed to comply with that Order and instead aggravated the dispute with SL Mining. The Government’s non-compliance and aggravating misconduct has led the ICC Arbitral Tribunal to issue, at SL Mining’s request, a Peremptory Order on 13 February 2020 in which the Tribunal:

  1. Ordered the Government to rescind the purported cancellation of SL Mining’s Licence or otherwise to reinstate it.
  2. Declared that the Government failed to comply with the ICC Emergency Arbitrator’s orders dated 30 August 2019, 8 September 2018, 4 October 2019 and 9 October 2019.
  3. Declared that the Government failed to comply with the ICC Tribunal’s interim order dated 4 November 2019.
  4. Ordered that, until ordered otherwise and pending the final resolution of the dispute by the Tribunal:
    • The Government lifts any prohibition on shipping or export of minerals directed at SL Mining;
    • The parties continue to comply with their obligations under clause 6.9(d) of the Large Scale Licence Agreement between the Government of Sierra Leone and SL Mining Limited dated 5 December 2017;
    • The parties refrain from aggravating and take no steps to aggravate the dispute between them;
    • The Government shall refrain from:
      • removing, dealing with, or otherwise interfering, directly or via third parties, with SL Mining’s assets, including equipment and stockpiles of iron ore, in relation with SL Mining’s Marampa iron ore project;
      • directly or indirectly operating itself, or allowing third parties to operate, the Marampa Project;
      • taking any steps towards the issuance of a mining licence and/or entry into a mining lease agreement relating to the Marampa Project or any part thereof to and/or with a third party; and
      • otherwise altering the status quo as of immediately before receipt of the letter purportedly cancelling the Licence.
    • Declared and ordered that the ICC Emergency Arbitrator’s orders continue in full force.
    • Ordered the Government to comply with the ICC Tribunal’s orders within 8 days of the Peremptory Order.

A peremptory order is a final order made by a tribunal specifying a time for compliance. It brings with it a number of adverse legal consequences for the Government.  The ICC Tribunal also found that “pursuant to the arbitration agreement between the Parties, as ratified by Parliament, “any decision” of this Tribunal “is final and binding and enforceable” and has “the same force and effect as a judgment of a court of the last resort of the Republic of Sierra Leone or any other appropriate jurisdiction.” SL Mining will not hesitate to take legal action against third parties who infringe its rights in relation to the Marampa Project.

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 mills in China in June and July 2019 from the Marampa Project. (END OF STATEMENT)

But in sharp contrast to the spirit with which commercial agreements and international disputes are resolved through negotiations; and in defiance of the Tribunal’s orders, the government of Sierra Leone through the Attorney General wrote to SL Mining and all of its contractors and principals, informing them of the government’s decision to seize and take control of the assets of SL Mining, if they are not removed from the mining site by the 28th February 2020.

The letter also states: “Please note that no Minerals Ore or other natural resources under this notice shall be deemed to constitute assets belonging to any entity or individual under this notice other than the Republic of Sierra Leone. Any attempt to remove Minerals, Minerals Ore or other natural resources is unlawful and criminal.

“The Republic of Sierra Leone wishes all to know that failure to remove the mining assets by the date of 28th February 2020, the Government of Sierra Leone will impose a charge of 50,000 United States Dollars for each day that the said assets remain on the lands of the Marampa Mines area, depriving the Government of Sierra Leone from productive and gainful use of its mineral resources.

“Also note that, after a further period of two months from the date of this notice, should the mining assets remain on the Marampa Mines area and having incurred the said charges stated above, the Government of Sierra Leone reserves the right to take all necessary action to secure the rights within the Marampa mining area.”

This is the full text of the letter sent by the country’s Attorney General to SL Mining, which today must be giving serious food for thought to anyone wanting to invest in Sierra Leone:

THE GOVERNMENT OF SIERRA LEONE OFFICE OF THE ATTORNEY – GENERA AND MINISTRY OF JUSTICE, 3rd floor, Guma Building, Lamina Sankoh Street, Freetown, Sierra Leone

AGMOJ/LM/M29/1

Timis Corporation (SL) Limited
Cosimo Borreli Walsh – Borreli Walsh
Nitani Perera
SL Mining Limited
Gerald International Limited,
Standard Chartered Bank (SL) Limited

Dear Sirs,

Re: NOTICE TO REMOVE MINING ASSETS FROM THE MARAMPA MINES AREA

I wish to refer to the above subject and to draw your attention to the recent termination of the SL Mining Ltd mining Licences over the Marampa mining area. I also wish to draw your attention to several legal actions which have been instituted (or are threatened) against the Government of Sierra Leone nationally and internationally.

In these actions which several conflicting claims have been made regarding the ownership of the Marampa Mine assets by yourselves of which the government of Sierra Leone is not in the position to authenticate such ownership titles or rights.

The claims have been made severally and jointly by persons known or described as:
1) Timis Corporation (SL) Limited 26 Brook Fields Motor Road, Freetown, Sierra Leone
2) Cosimo Borreli Walsh –Borreli Walsh Level 17, Tower 1 Admiratty Center, 18 Harcourt Road , Hong Kong
3) Nitani Perera 4/F Palm Grove House, Road Town , Tortola, British Virgin Islands
4) SL Mining Limited Brook Fields Motor Road, Freetown, Sierra Leone
5) Gerald International Limited 3rd Floor, 1 Strand, Grand Buildings, Trafaigar Square, London WC 2N 5 HR
6) Standard Chartered Bank ( Representing’ The Banks; Lenders to London mining Limited) Lightfoot Boton Street, Freetown, Sierra Leone.

The Government of Sierra Leone is aware that there are agreements or arrangements between one or more of the above entitles and interests in relation to the competing and/ or consolidated claims to the assets at the Marampa Mines, which the Government of Sierra Leone has guaranteed, endorsed or is a party thereto.

Also, the Government of Sierra Leone cannot identify, verify or certify the authenticity of all the various claims and interests asserted over the assets at the Marampa Mines. And there are also no valid existing mining licences currently held over the Marampa Mines.

The Government of Sierra Leone therefore calls on all the claimants and / or purported owners of the assets (however they may determine their rights thereto, jointly or severally) to remove the mining assets from the land lying in Marampa mines and surrounding areas by the 28th February 2020.

Please note that no Minerals Ore or other natural resources under this notice shall be deemed to constitute assets belonging to any entity or individual under this notice other than the Republic of Sierra Leone. Any attempt to remove Minerals, Minerals Ore or other natural resources is unlawful and criminal.

The Republic of Sierra Leone wishes all to know that failure to remove the mining assets by the date of 28th February 2020, the Government of Sierra Leone will impose a charge of 50,000 United States Dollars for each day that the said assets remain on the lands of the Marampa Mines area, depriving the Government of Sierra Leone from productive and gainful use of its mineral resources.

Also note that, after a further period of two months from the date of this notice, should the mining assets remain on the Marampa Mines area and having incurred the said charges stated above, the Government of Sierra Leone reserves the right to take all necessary action to secure the rights within the Marampa mining area.

By this letter, all claimants of the assets on the Marampa mining lands are advised to act ( jointly or severally , as you so determine by or amongst yourselves to the extent of your interests) to vacate the lands of the Marampa Mines site of all your assets with immediate effect.

You MUST also ensure that all your liabilities to any private entity, or individual occurring out of use of any assets or claims with respect thereto is settled upon removal of the assets.

This Notice herein conveyed, will be published in the Sierra Leone Gazette and in other media outlets for the attention of the general public, and other parties (or their assigns) that may have any interest in the Marampa Mines asset that has not been disclosed to the Government of Sierra Leone.

Yours sincerely

Dr. Priscillia Schwartz – Attorney General and Minister of Justice

Cc:
H.E President, of the Republic of Sierra Leone Dr. Julius Maada Bio
The Hon. Vice President, Dr. Mohamed Juldeh Jalloh
The Hon. Speaker, Sierra Leone Parliament
The Chief Justice, Judiciary of Sierra Leone
The Chief Minister

 

Statement on ICC Arbitral Tribunal’s Peremptory Order relating to SL Mining’s Marampa Project

12 Comments

  1. In fact the government is a bunch of senseless people surrounding the president. Why government don’t review and re-negotiate with SL Mining instead of terminating the agreement. No serious investor will invest in Marampa iron ore.

  2. Mr. Bill Coleman – yes, dubious deals from the previous regime ought to be looked into. The president certainly has my support in that regard.

  3. Indeed,empty vessels make the most noise. The big question is: how do you explain to a crawling giant Sea turtle that the massive, heavy,stone like shell on its back,was nature’s exquisite design,and not a punishing burden and an eerie curse?It’s a blessing,a formidable shield,armor,and device used to protect the gentle creature against predators. Agree,or not? A bewildered turtle replies with a loud, emphatic; “No Saidu not buying it.It is I that carry the heavy burden not you; I alone know the pinches of my shoes”(lol)

    Similarly, the enormous responsibilities that come with power cannot be shrugged,brush aside,and ignored; they are ever present, and permanent like the shell on the giant turtles back. Call it, a blessing or a curse,it’s entirely up to you. This
    President seriously thought governance was as easy,as building sandcastles,like drinking lemonade,and ginger beer;(lol)their distorted vision,and attitudes of putting on left shoes,on right feet,and horses behind carts,and wagons they are supposed to pull,speaks volumes about how inept,they really are. The credible ICC tribunal made two key decisions against,
    the government of Sierra Leone;Firstly,reverse, and lift the export ban against SL Mining,and secondly,government did not have the RIGHT to cancel the license of SL Mining. WOW!!!

    Now let me explain what this exactly means. Listen,we enter into contracts specifically to enforce promises, and obligations,and to bring transparency, and clarity to terms of agreements,and for both parties involved to fulfill their legally binding expectations. SL Mining had all of this covered in their contract,that’s why they didn’t hesitate, even for a minute to take their complaint to the ICC. To put simply,these people with the best lawyers money can buy already know they are going to win,and they will – Better believe that! Better believe also,for the ICC to rule in your favor,there are validity clauses pegged, and solidly anchored in those contracts to protect the rights Of SLMining.

    So Great Sayedna,why are these Caterpillars so naive,and gullible to gobble,and hastily swallow down lies being fed to them(lol) Well,incompetent men are like ugly women,afraid to lose a handsome man. Tell them endless lies,and they will believe you,because they are shackled by the fear of what they hold sacred,precious,and dear.(lol) The loudest Shout out to the APC members in Parliament,Dr Samura Kamara,and Chief Sam Sumana the baton will soon be in one of your illustrious hands,grab,and RUN with it…Rising Sun Will Rise Again.

  4. What I know for sure is that this government is fighting for the betterment of our country. I believe they know what they are doing, and all we can do as citizens is to support our government, so we can have a better Mama Salone.

  5. Mr. 4na – you have a point there and it is well taken. The ideal situation would be for the government to adhere to the already agreed contract. The ideal situation could’ve also been – not having a political system that allows powerful men to make dubious nationwide decisions that surpass their term limit. The ideal situation could’ve further been – not letting these men go unaccounted for their actions and leave the country with no choice but to pick up the pieces that they have left behind, which in this case we are doing more than merely picking pieces. I suppose it is an all around sketchy situation that we have got in our hands, Mr. 4na.

    Commercial negotiations in most cases can only take you so far, especially when dealing with big corporations and you are at a disadvantage. These companies are not in the business of compromising. No sir. Interestingly, these companies are so hard on profit that if somehow the slightest suspicion that your soul is also up for grabs is to surface, they will do everything in their power to take that too.

  6. Rank idiocy. If GoSL succeeds in kicking SL Mining away, any and all benefits will be ephemeral. Salone will suffer more, when you consider that their action will just frighten away anyone that would like to invest in the country. This is already the reality.

  7. Did the Bio government discover that there was no issued licence from the EBK regime? The minister mentioned that in her report; and if it is anything to go by, then the miming company will have itself to blame. The law has blades on all bearings. Let’s investigate this difference (if there was an issued licence from the EBK regime) immediately as a nation.

  8. I believe this deal was a bad one and the people of Sierra Leone were short handed in it. I also believe that Bio is fighting tooth and nail to right this wrong. With that in mind the people of Sierra Leone should support the president in the fight to make amends. We shouldn’t keep settling for mediocrity just because few men within our circle want their hands permanently rub at expense of the rest of us. No, we should never settle for anything less than we rightfully deserve. To add to that, it’s common for change to be a difficult process, but if it is being carried out for a better tomorrow, then I believe it is worth to endure and sacrifice through it.

    • Mr. Kaloko, there is no denying that the deal or contract being unfavorable to our nation. All across the globe, investors always make sure they have the upper hand in negotiating deals. In our every day lives, we deal with businesses and firms whom in many respect provides good and services in contractual basis where the consumers or clients are always shorthand. In light of this, we all know once a contract had been sign or seal, the only way out of it without penalties being incurred is via diplomatic negotiation.

      By all indications, the government of Sierra Leone signed a contract with SL mining. Yes, the contract was done through dubious means, signed at the eve of the last EBK regime parliament retirement. However, the Bio regime came into power, for almost 15months, they over saw SL mining revamping their investments and the current minister of mines was even present at their first shipment of iron ore praising the company and the potentials that lies ahead. The question is, why did they wait so long for these investors to have poured millions of dollars before interjecting? Being that a contract has already been signed, why not use diplomatic channels to renegotiate or allow these investors to have at least start to see a return on their investment?

      Frankly speaking, the current method and approach are the worst thing that can happen to any investor. Imagine you being an investor, you signed a contract with a particular country or firm, walking away with higher prospect in your new found venture. Fast forward months later, you spend millions of dollars to actualize your venture. Now, just when you started producing products, the partner you signed the contract with suddenly jump in, dictating for you to either pay him/her more money or halt your production. Is this scenario acceptable by any of you supporting this actions by our government? I obviously don’t think so. So by all indications, our government have made a big blunder and they continue to do so following the advice of classroom professors who have never practice law in their lives.

    • “We shouldn’t keep settling for mediocrity just because few men within our circle want their hands permanently rub at expense of the rest of us. No, we should never settle for anything less than we rightfully deserve.” Mahmoud Kaloko.

      Mr. Mahmoud Kaloko,

      Excellent observation. I could not have said it better. Your observation underscores President Bio’s arguments relative to the duplicitous transactions of the dysfunctional and iniquitous APC government of Ernest Bai Koroma.

      Who should be the beneficiary of contracts signed for the minerals of Sierra Leone? The suborned head of state and the reprobate and shady international investors? This is how the the APC governed Sierra Leone – chicanery and double-dealing all the way . Consequently, the country was forced to descend into an abyss of mediocrity and shame with no one around to declare dissent or sound a contrarian opinion to the faulty logic of the establishment of those days. Afterwards the Chairman for Life was always right.

      Had those nation wreckers and agents of governance malady been allowed to stay in office, Sierra Leone as a nation would have been reduced to a mere geographical expression incapable of ever functioning as a viable political and economic entity.

      Indeed, it is laughable that APC sycophants with no idea of what is contained in those rotten contracts that the two-timing Ernest Koroma signed would have the flimsy courage to question the wisdom of the government’s erudite lawyers in tearing the useless papers on which they were written.

      Yet what many cannot remember is the President announcing upon assuming power that all mining contracts were going to be reviewed. There had always been suspicions that APC kleptocrats had conspired with unscrupulous international actors to rip off Sierra Leone. President Bio kept his promise and it is time for Sierra Leone to stand up to the crooks and bullies, both domestic and foreign. Way to go President Bio!!!

  9. Whilst I agree it’s the duty of the government to protect the interest of Sierra Leone and its people it must however be conducted in a manner that complies with existing contract terms. Every decent contract will have conditions for termination. The government should not be acting in a manner that undermines the tribunal but should rather wait for a decision before taking further action, as it sends the wrong signal. Frustrating as it may be when there are potential investors ready to take over with a better deal.

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