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UNDERSTANDING THE RACKET BEHIND MINING LICENSE CANCELLATIONS AND THE DAMAGE TO THE IMAGE OF YOUR GOVERNMENT

November 16, 2021

Dear President Julius Bio,

His Excellency, the Press Release issued by Marampa Mines (SL) Ltd last week saying that “significant progress has been reached with your Government on the terms of a new Mining Agreement” should come as big relief for all stakeholders. While it is great news, the question is still begged as to whether the losses incurred by all stakeholders could have been avoided. Certainly, your Government is going to get a new Mining Agreement far better than the one inherited from the APC. The point to be made however, is that a better Mining Agreement could have been still achieved with Gerald Metals without recourse to litigation first.

The progress that Gerald Metals is now announcing has come against a very difficult background in which the company’s litigation against your Government cost both parties loss of millions of dollars in legal fees. For Government the additional loss incurred as the result of the litigation included all the taxes and royalties that were never received while the case lasted. Community people equally, suffered great loss as the result of the surface rents they never received, and the absence of Corporate Social Responsibility investments. The riot in Lunsar was testament to the suffering brought on by the license cancellation.

Mr President, the losses incurred by your Government and Gerald Metals are not going to be recouped; but the country can learn from the incidence to protect the future of mining in Sierra Leone. The key thing that your Government should learn is how to manage the cancellation of mining licenses. The Gerald Metals saga was triggered by Government’s cancellation of the company’s mining license. Presently, Government is facing another legal challenge in the ECOWAS court as the result of another mining license cancellation. Government has the sole right and powers to decide who holds, or do not hold mining license in Sierra Leone. But there is however, no point in cancelling a mining license first, face litigation, and end up negotiating a settlement.

Mr President, your Government needs to understand that corruption by NMA officials is behind this penchant for mining license cancellation. There is huge corruption opportunity in mining license cancellation that firstly and mostly benefits officials of NMA. When a mining license is cancelled, it triggers massive interest in the concession from international companies. The lobbying that follows for the acquisition of the freed concession is always inevitably accompanied by bribes; paid to those who would have significant influence in deciding the new owners of the concession. For officials of the NMA, triggering the opportunity to obtain bribes is the real motivation for the cancellation of mining licenses. Sometimes, it is the mining companies that instigate NMA officials to cancel a mining license so that they can grab it. These mining companies do so with the offer of bribes. All the talks about non-performance of a license holder are often veils put up by NMA officials for the real intentions to obtain bribes from the new applicants for mining licenses.

Mr President, it is my personal belief that your Government is very sincere regarding the vision for mining in Sierra Leone that benefits the country, mining companies, and communities. Your Government must however, now begin to put primacy on winning better mining agreement through negotiations as first recourse, than through negotiation forced by the prospect or reality of litigation.  Mining licenses cancellations give the country and your Government an image of being unreliable. Unreliability is a key failed-state behavior. This image of being unreliable will come to affect Foreign Direct Investments in other critical high-economic impact sectors.

Going forward Mr President, the decision to cancel a mining license should be determined by you, working along with cabinet to first evaluate its utility; as against negotiations with the license holder. First recourse to negotiation should be a must especially in cases where the license holder has demonstrated some measure of investment in the concession; with intentions to start or continue mining. In these circumstances, the focus of Government should be to facilitate the license holder’s quicker and better performance so that everybody wins.  As a last word, Mr President, the quick and easy resort to license cancellations by NMA that has caused the country so much loss and blighted your Government’s doing-business image, is fed more by corruption at NMA than respect for your vision of a better mining sector in Sierra Leone.

Yours sincerely,

A Concerned Mining License Holder  

Cc. The Commissioner, Anti-Corruption Commission

      The Chairman, Parliamentary Oversight Committee on Mines

      The Minister of Mines and Mineral Resources

      Civil Society Organisations working on mining issues

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