Fritong Post Investigating Team: Sierra Leone Telegraph: 13 September 2020:
As the Parliamentary Committee on Transparency and Accountability continues to probe Sierra Leone’s National Minerals Agency (NMA), more questions than answers have emerged regarding the circumstances under which four large-scale mining licenses were granted to China Kingho Company Limited.
It was revealed during last Tuesday’s parliamentary committee hearing, that no proper due diligence was done before awarding the mining licenses to the company to undertake large-scale mining operations in Sierra Leone.
It was further established that the parent company, China Kingho Energy Group, is bankrupt with a net worth of a paltry 667,000 dollars.
The complex and seemingly opaque structure of the parent company, prompted lawmakers to inquire into the application details of its subsidiaries in Sierra Leone. The investigations found that the four subsidiaries in Sierra Leone have defaulted on the terms and conditions of their license agreements and violated certain provisions prescribed in the Mines and Minerals Act of 2009.
China Kingho Mining Company Limited, Mass Energy Mining Company Limited, Northern Mining Company Limited and Southern Mining Company Limited are all subsidiaries of China Kingho in Sierra Leone.
These subsidiaries are in arrears of 4.9 million dollars due to the Government of Sierra Leone.
The evidence adduced shows that since the companies were granted four large-scale mining licenses in 2014 they have not yet started mining operations because they are either bankrupt to undertake large-scale mining operations or simply cannot attract a financier to partner with.
In a letter addressed to the National Minerals Agency, the managing director of China Kingho stated that the projects required huge capital investment for the construction of railways and port facilities.
The letter reads: “We have approached several partners in this regard but it has been extremely difficult to get the much-needed capital…We are constrained to get dependable partners to commence work with.”
The company then decided to relinquish one of its licenses (the Southern Company Limited) and pleaded with the NMA to waive off the penalties attached to the outstanding payment of 4.9 million dollars.
It was further revealed that the company did not fulfill certain criteria for the award of large-scale mining license under the Mines and Minerals Act of 2009.
The Committee on Transparency and Accountability inquired into whether China Kingho has the adequate financial resources, technical competence and experience to carry on effective mining operations in Sierra Leone, a precondition for the award of large-scale mining license stipulated in section 108 subsection 3 of the Mines and Minerals Act of 2009.
The Committee exposed one of the shareholders/directors of China Kingho who happens to have two different identities. It was revealed that this individual bears the name Gilbert Zao but has a completely different name on the mining license application document.
The Committee perceived there was some form of corruption in the awarding of licenses to China Kingho Company Limited.
The Members of Parliament suspected the Minerals Advisory Board was either influenced or remained complicit in its decision-making process to approve large-scale mining licenses to China Kingho.
The committee quizzed the NMA boss to get the facts but he denies any wrongdoing.
Members of the Committee frown at the Environmental Protection Agency, National Minerals Agency and Ministry of Mines and Mineral Resources for not performing due diligence on China Kingho before awarding those large-scale mining licenses.
The lawmakers are suspicious of the decision-making process and are anxious to probe deeper to unearth whosoever benefitted from such mining approval decision.
Sierra Leone is endowed with vast mineral resources. But these resources have not been harnessed to promote national prosperity and an efficient, dynamic and self-reliant economy.
Since the discovery of diamonds in the 1930s, Sierra Leone’s mineral wealth has been largely plundered. The plunderage of these natural resources was identified as one of the major factors that ignited the civil war.
Many of those who took up arms attributed their struggle to the high incidence of poverty and unemployment exacerbated by massive corruption and abuse of power by the ruling elites. They blamed the governing elites for being selfish and insensitive to the plight of the masses.
During the Consultative Conference on Peace and Security in April 1999, the then British High Commissioner to Sierra Leone – Mr Peter Penfold observed:
“The tragedy of Sierra Leone is that her people are among the poorest in the world while the country is among the richest. The reasons for this are entirely man-made. Other countries in the world are poor because of natural disasters, few resources, unfertile territory or bulging populations. Not so in Sierra Leone. Just a relatively few people are responsible for the misery and hardship suffered by so many.”