Sierra Leone Telegraph: 1 December 2015
African Minerals Ltd., Sierra Leone’s largest mining company is in hot water again. Owned by the Chinese and regarded by the government as its crown jewel, the company is under tremendous pressure as iron ore production and export sales struggle to recover.
The last three years have proved quite turbulent for the company, despite its significant contribution to Sierra Leone’s GDP, which in 2011 made a huge jump from 4.5% in 2010 to 11% – one of the highest growth rates in Africa.
But bad management, under-reporting of corporate financial affairs and corruption, as well as the government’s failure to provide adequate governance oversight, brought the company to its knees in 2013, and was declared bankrupt.
The company’s rise to fortune in Sierra Leone, since 2007 has not been without huge social and reputational costs.
It had been accused by workers and local residents of Tonkolili district of paying peanuts to the local workforce, and operating under poor working conditions.
Residents living near the mines have also protested against what they regard as serious violation and abdicating of its corporate social responsibility.
According to reports by the London Guardian newspaper and Mining.Com, African Minerals Limited is being sued in a London court over allegations that it evicted residents and violently mistreated workers and villagers living close to one of its mines in Sierra Leone.
The iron ore company, whose Tonkolili project was its flagship before being put on care and maintenance in 2014, “is accused of complicity in false imprisonment, assault and battery, trespass and theft of the claimants’ property. It is also allegedly implicated in a fatal shooting of a 24-year-old by police during a protest over pay and conditions,” according to a weekend report in The Guardian.
The multi-million-pound lawsuit will involve 142 claimants who are aiming to receive compensation for injuries sustained during two incidents in 2010 and 2012.
African Minerals denies the allegations and says it has “no vicarious responsibility” for actions taken by police and that English courts lack jurisdiction in Sierra Leone, states the media report. (Photo: President Koroma signed mining agreement with African Minerals).
It’s just the latest piece of bad news for African Minerals, which used to list on the London Stock Exchange but now trades over the counter as a penny stock.
In April of this year Shandong Iron and Steel Group acquired the remaining 75 percent of Tonkolili for around $170 million.
The Chinese steel company said in April that it planned to return the mine, which is the second largest iron ore mine in Africa, to full production during the wet season.