Marampa Mines agreement: A slap in the face of government

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By Alusine Sesay

The large-scale license agreement between the Government of Sierra Leone and Marampa Mines limited dated November 2021, can be described as exploitative because it deprives the government and people of Sierra Leone the much-needed resources  due to of it stabilization provisions.

Many experts now believe those provisions are detrimental to the achievement of the sustainable development benefits of mining, placing constraints on the ability of government to raise revenue to undertake social and economic development.

The agreement states that MARAMPA MINES, in the conduct of its activities in Sierra Leone pursuant to the agreement, shall be liable for Income Tax on its chargeable income derived in Sierra Leone at the following rates and in accordance with clause 6.3(c): “Years 1 to 5: 6%, Years 6 and thereafter: 25%.”

The above provision deprives the government of desperately needed revenue. The law of Sierra Leone puts income tax at 30 percent for mining operators.  This needs urgent negotiation to ensure its review in the best interest of government and the people of Sierra Leone.

The agreement also states that MARAMPA MINES shall not be liable for any taxation based on turnover, retain earnings or otherwise unless provided in the Agreement.

The agreement puts withholding tax at 5 percent. But the law of Sierra Leone prescribes 6.5 percent.

The agreement indicates, “Any non-Sierra Leonean Affiliate and Nominated Supplier not registered in Sierra Leone providing services to MARAMPA MINES shall be considered as non-resident for tax and fiscal purposes.”

A mining expert, Mohamed Kamara, said that some of these concessions which amount to millions of dollars, could have been used by the government to support development projects.

He maintained that the agreement is bad and should be reviewed. He urged the government to renegotiate to ensure a win-win situation. 

Kamara maintained that if the agreement is maintained, the nation stands to lose hundreds of millions of dollars in the next 25 years. “The Marampa Mines agreement is unfair to the Government and People of Sierra Leone,” Kamara said.

He advocates for a transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development. The concept, he said, is therefore consistent with the principles of sustainable development, wealth creation and the integration of the mining sector into Sierra Leone’s social and economic development process.

The Mining expert implores the government to solicit good advice and support when negotiating mining agreements; and promote transparency and accountability by ensuring the removal of the confidentiality clause in mining agreements. 

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