SL Mining reacts to Sierra Leone government cancelation of iron ore mining contract

Sierra Leone Telegraph: 10 October 2019:

On 7th October 2019, SL Mining Limited – a wholly owned subsidiary of the American owned Gerald Group, said it received a letter from the government of Sierra Leone, ‘purporting’ to cancel with immediate effect, SL Mining’s large scale mining licence in the country.

The Government’s purported cancellation, the company says, is contrary to applicable law, the parties’ contract and the Government’s international treaty obligations.

“SL Mining has always been and remains in compliance with its obligations under the parties’ contract and the law. The Government’s purported cancellation is also contrary to two decisions issued by the Emergency Arbitrator officiating in an ICC arbitration between SL Mining and the Government, namely an Order dated 8 September 2019 and a Modified Final Order dated 4 October 2019 which explicitly requires the Government not to cancel SL Mining’s Licence.”

SL Mining says it is calling on the Government of Sierra Leone “to withdraw the purported cancellation immediately, failing which SL Mining will pursue all available remedies against the Government and any relevant third parties, including for compensation for the harm caused which we expect to be in excess of USD 500 million.”

SL Mining is a wholly-owned subsidiary of Gerald International Limited, which is the holding company for all entities in Gerald Group. Gerald Group is one of the world’s leading commodity groups, and the oldest and largest employee-owned commodity 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 in June and July this year from the Marampa Project.

The government of Sierra Leone is accusing the company of breach of contract and reneging on its financial obligation to the government, including non-payment of royalties, a claim the company denies.

But as the government of Sierra Leone flexes its muscles on SL Mining, there are fears this radical approach may backfire on the government, with serious consequences for the economy in the long-term as credible foreign investors pack their bags.

Sierra Leone needs over $300 million investment in key sectors of the economy, such as farming, tourism, and agro-processing, if the government is to achieve its Mid-Term National Economic Development Plan unveiled last year by the president.

Investor confidence in Sierra Leone remains weak, after decades of poor governance, corruption and poor resilience to recent global economic shocks.

4 Comments

  1. Sierra Leone has and will always be blessed with iron ore and no company or court will change that fact, but all we need now is a fair deal which will put a big smile in the faces of our citizens and nothing less. Exporting over $90 million worth of our natural resources and receiving only $3 million is just daylight robbery. I hope our leadership will stand firm and refuse to sell our birthright for a bowl of porridge.

  2. Thank you once again BRAHIM for drawing attention to what I said once before; indeed words of truth never perish,or die. The shocking arrogance of this SLPP government knows no bounds,its only going to spell disaster for our fragile nation because,its now clear, there are frightening consequences to come,which might just cripple the economy of poor struggling,Sierra Leone forever. Yes of course,and yes indeed,Arrogance,Pride,and Supidities can endanger the livelihoods of innocent,unsuspecting millions. True.

    I once saw a group of silly fishermen,unfazed that threw a lighted dynamite into the midst of muddy,shallow waters full of crabs,and little squirmy fishes shredding them to tiny pieces,rendering them totally worthless. This government in power is doing the same thing presently. Bad decisions have severe consequences,my friend,the fiery dynamites or arrogance,and recklessness this government has thrown callously,at Iron ore investors,struggling to find a solid footing in the global mineral market,is surprising,and quite disturbing.

    Does this government and its kindergarten mindsets,truly believe they can win a solid decision against legitimate,and seasoned investors in an International Court of law?You’ve got be be kidding me! The longer they allow this matter to drag on and remain unsettled, the deeper into troubled financial waters,this nation is going to drift,and end up, finally sinking. You can count on it! Rising Sun Will Rise Again.

  3. I remember clearly, this is exactly what Mr Saidu Conteh warned was going to happen – LAWSUITS RANGING IN THE MILLIONS OF DOLLARS THAT WILL EVENTUALLY LEAD TO SANCTIONS being imposed on exports from Sierra Leone.

  4. Indeed. The final straw to break the camel’s back. IRON ORE PRODUCTION IN TROUBLE! You see, nobody cares as long as the DIAMONDS are coming out of KONO DISTRICT and entering the WORLD MARKET. Interesting and challenging times ahead. GOD BLESS our DIAMONDS and KONO DISTRICT.

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