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Sierra LeoneA MINERALS RENAISSANCE%GSYRXV]VMGLMRREXYVEPVIWSYVGIW-VSRSVIQMRMRKSTIVEXMSRWLEZIVIWYQIH(MEQSRHTVSHYGXMSRSRKSMRKMR/SRS JVSQXLVIIOMQFIVPMXITMTIW
4VMQEV]KSPHI\TPSVEXMSREXEREHZERGIHWXEKI
m i n i n g - j o u r n a l . co m
Established 1835
A supplement to Mining Journal
COVER_SierraLeone2013.indd 1 30/05/2013 12:02
PANAFRICAN GROUPThe Panafrican Group of Companies, owned by Mr. Charles Field-Marsham, a Canadian national, distributes KOMATSU construction and mining grade machines as its main product line in Kenya, Tanzania, Ghana, Nigeria and Sierra Leone. Being in business in Sub-saharan African for more than 15 years, Panafrican understands the markets, customers’ needs, and the unique challenges that arise in some of the most remote regions. KOMATSU is a full-line equipment manufacturer and the 2nd-largest mobile construction and mining equipment manufacturer in the world.
SOLUTIONS PROVIDERRather than simply marketing and selling equipment, Panafrican seeks to provide equipment solutions. Panafrican ensures that it offers the appropriate equipment for the right application in order for the customers to receive the cost-benefits from the production and performance of the machines throughout the equipment’s economic life. Panafrican focuses not just on sales and sales prices but more on maintenance and service support over the life of the asset.
Our experience in product support ranging from parts supply and technical support to full MARC agreements allows for flexibility and a customized approach to the jobsite’s application and requirements.
INDUSTRY VERTICALSOur focus is to offer specialized solutions, custom-made for our clients’ needs, with a particular emphasis on more sophisticated fleet owners that understand the life of asset model and the value in production. This targeted approach is geared towards particular industry verticals where
Panafrican understands the challenges facing our client, including large-scale mining, light and alluvial mining, agriculture and forestry, cement and aggregates, power projects (in particular, camps and civil support) and civil.
In these industries, value in productivity far outweighs machine pricing, and the value of after-sales support is critical to meet client performance or productivity requirements. The equipment capital cost represents but a small component of the customer success. Be it machine selection, specialized attachments, on-site support, inventory availability among others, we seek to provide solutions that address the particular needs of those markets.
SIERRA LEONEOur operations in Sierra Leone commenced in 2011. We are attracted to the potential in the mining sector including what have originally been the traditional minerals mined in Sierra Leone (bauxite, rutile and diamonds) as well as the new projects involving iron ore and / or gold. We are investing in in-country and on-site technical support and parts stock. Panafrican is also developing back-up parts stocks in Dubai and in Europe.
We have a strong history in being able to mobilize resources quickly into remote regions utilizing current technical capacity and support, while we seek to develop in-country talent through some of our newly developed and market-leading training programs.
Our goal is to be the solutions provider of choice to a select group of customers.
Call us for more information.West Africa + 233 302 215840 East Africa +254 715 [email protected]
1p_PanAfrican_ad.indd 2 28/05/2013 17:56
Mining Journal special publication – Sierra LeoneJune 2013
Sierra Leone
33
On behalf of His Excellency the Presi-dent, Dr Ernest Bai Koroma, the Government and People of Sierra
Leone, I hereby extend an open invitation to you all to visit our beautiful and friendly coun-try and participate in unparalleled investment opportunities.
Sierra Leone has enjoyed peace and stability for the past decade. After three internationally recognised free and fair elections, Sierra Leo-ne’s credentials as a multi-party democracy are now well entrenched.
Sierra Leone is richly endowed with mineral resources and investment opportunities there-fore abound in the fields of mineral exploration and mining of a variety of minerals including chromite, iron ore, platinum, gold, diamond, bauxite, rutile, ilmenite, zircon, and rare earth elements such as columbite – tantalite (coltan).
Sierra Leone’s Agenda for Prosperity identi-fies development of the minerals sector as a fundamental pillar for promoting sustainable economic growth. The mining sector is already a key contributor to GDP and government revenue, and the expansion of the industry is
expected to raise Sierra Leone to a
middle- income country by 2035.
The govern-ment is fully committed to improving gov-ernance of the
mining sector, and ensuring that it becomes transparent, accountable and promotes good investment. A world-class Mines and Minerals Act was passed in 2009, and a National Miner-als Agency (NMA) was established in 2012 to take responsibility for the implementation of minerals sector policy, legislation and regula-tions in a professional, transparent and accountable manner. Diamond trading is in accordance with the Kimberley Process Certi-fication Scheme.
The Ministry of Mines and Mineral Resourc-es is in the process of developing a Geo-data Information Management System, which aims to manage geological information by develop-ing a geological database, building a network infrastructure and a website portal where per-tinent information about the extractive indus-try in Sierra Leone can be easily accessed.
Our rich mineral endowment and recent reforms in improving the governance frame-work for the mining sector make Sierra Leone a global destination for investment in the min-ing sector. Our tax regime is also competitive, and investments are adequately protected by our laws, statutory instruments and regula-tions.
Our Government therefore encourages good, reliable and credible investors, their contractors and financiers to participate in this vibrant sector.
I look forward to welcoming you to Sierra Leone in the near future to participate in the
Message from the Minister“Our rich mineral endowment and recent reforms make Sierra Leone a global destination for investmentin the mining sector”
This supplement is published with Mining Journal, published weekly, which is available only as part of a subscription with Mining Magazine and Mining, People and the Environment, plus online access.
Annual subscription – UK and Europe £360 (580 euros) Rest of the world US$650
Published by Aspermont Media, 4th Floor, 120 Old Broad St, London EC2N 1AR, UK. Printed by Stephens & George Magazines, Merthyr Tydfil, UK.
Registered as a newspaper at the Post Office.
Subscription records are maintained at Aspermont Media, PO Box 1045, Bournehall House, Bournehall Road, Bushey WD23 3ZQAspermont Media, publisher and owner of Mining Journal (‘the publisher’) and each of its directors, officers, employees, advisers and agents and related entities do not make any warranty whatsoever as to the accuracy or reliability of any information, estimates, opinions, conclusions or recommendations contained in this publication and, to the maximum extent permitted by law, the publisher disclaims all liability and responsibility for any direct or indirect loss or damage which may be suffered by any person or entity through relying on anything contained in, or omitted from, this publication whether as a result of negligence on the part of the publisher or not. Reliance should not be placed on the contents of this magazine in making a commercial or other decision and all persons are advised to seek independent professional advice in this regard.
Subscriptions and circulation Stuart Balk T +44 (0)20 7216 6064 E [email protected] Subscription enquiries T +44 (0)20 8955 7050 F +44 (0)20 8421 8244 E [email protected] Box 1045, Bournehall House, Bournehall Road, Bushey WD23 3ZQ, UK
Publisher Simon ThompsonChief executive officer David Nizol Chairman Andrew Kent
© Aspermont Media 2013 ISSN 0026-5225
EditorialLouisa Seymour E [email protected]
Head of production / designer Tim Peters Sub editors Jim Adlam / Woody PhillipsEditorial enquiries T +44 (0)20 7216 6060 F +44 (0)20 7216 6050 www.mining-journal.com
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Sales manager – supplementsRichard VerthT +44 (0)20 7216 6068E [email protected]
CONTENTSMessage from the Minister / SL: fast facts 3SL could be the new jewel in Africa’s crown 4African Minerals new financing arrangements 8SL climbs eight places in Doing Business 2013 8IMF: strengthening growth in sub-Saharan Africa 8Moving the Govt’s gold and diamond offices 10Sustainable development in action 11London Mining posts record Marampa figures 15Tight monetary policy reduces inflation 17China to invest US$6bn 17Sunergy to supervise tests at Pampana River 17The NMA: private-sector pragmatism 17Key contacts 18
Company profiles:Sierra Rutile 16Sierra Mineral Holdings Vimetco 14
Advertisements:African Minerals 19Amara Mining / Cluff Gold 9Cape Lambert 5EDAL Drilling 8Energold 15Gambia Bird 20Nimini 7Octea 12Panafrican Group 2SRK 4 Cover design: Tim Peters
Media
Alhaji Minkailu Mansaray, the Honourable Minister of Mines and Mineral Resources
Sierra Leone: fast facts
4STYPEXMSR5,612,6854STYPEXMSRKVS[XL 2.3%)XLRMGKVSYTW Temne 35%,
Mende 31%, Limba 8%, Kono 5%, Creole 2%, Mandingo 2%, Loko 2%, Other 15%
0ERKYEKIWEnglish, Mende, Temne, Krio
6IPMKMSR Muslim 60%, Christian 10%, Other 30%
+SZIVRQIRXConstitutional democracy
0IKEPW]WXIQEnglish Common Law and Customary Law
)\TSVXWUS$1.168 billion-QTSVXWUS$1.675 billion'YVVIRG]Leone
development of our vast mineral resources in an efficient, economic and environmentally-sustainable manner that will result in a “win-win” situation: sustainable development of our people as well as ensuring good returns for investors.
Global Expert to the Mining and Metals Sector
Whether you are an institutional investor looking for strategic advice, or an explorer, developer/producer requiring more detailed technical input, we at SRK Consulting can provide you with a focussed multi-disciplinary team.
We recognise that in an increasingly integrated world, local presence and global coverage are key to addressing the needs of your site team, head of!ce executives, funding institutions and specialist advisors. With over 1,600 employees in 50 of!ces in 22 countries, SRK Consulting is ideally positioned to address your speci!c requirements. Access to expert consultants, associates and strategic partners with a proven track record in the mining and metals sector enables us to partner with you for the completion of:
Exploration Feasibility Studies ESIAs Acquisition/Vendor Due Diligence Independent Engineers Reports
CPRs 43-101 Technical Reports Mineral Asset Valuations
European & Central Asian Consulting Practices
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Kazakhstan www.srk.kzRussia www.srk.ru.comSweden www.srk.se.comTurkey www.srkturkiye.comUnited Kingdom www.srkexploration.com
www.srk.co.ukVisit us on stand 6 at the
West Africa Mining Investment Summit
sierra-leone-supplement.indd 1 5/28/2013 9:31:49 AM
Mining Journal special publication – Sierra LeoneJune 2013
Sierra Leone
5
According to figures released by the OECD on May 27, the mining sector has had a massive impact on GDP,
with the country seeing a real GDP growth leap from 6% in 2011 to 16.7% in 2012. It is projected to stabilise in 2013 and 2014.
Additionally, Sierra Leone has risen eight places in the latest World Bank report ‘Doing Business’, and ranks as one of the top reform-ers since 2005 in improving business regula-
tion for domestic firms, property registra-tion and “narrowing the distance to
frontier”. Iron-ore projects are seen by analysts at the OECD as being the key contributor to GDP growth, and it is the expansion of the extractive sector that is per-ceived as initiating a transformation of the economy.
John McGloin, executive chairman of Amara Min-ing, says: “Sierra Leone is definitely up and com-
ing. There is a long tradition of mining going back to pre-colonial times ranging from the diamond industry to in more recent times rutile and iron ore. In particular, iron ore has seen a huge amount of inward investment and the infrastructure development associated with that has been pretty amazing. I have been travelling to Sierra Leone since 2003 and the changes that I have seen in the country have been phenomenal.”
McGloin explains his view is that there is still a huge amount of potential in Sierra Leone
as it has not seen vast exploration outside iron ore and mineral sands. He adds: “There’s quite a bit of gold exploitation; we are just putting into operation the country’s first formal gold mine. The geology of the country is not dis-similar to South Africa and Botswana and, in theory, this should stimulate inward invest-ment as there is a highly prospective geology. There are positive nickel deposits and copper and platinum associated with mid-oceanic ridges and abductive material. Basically, what you have in Sierra Leone is the right geology
www.capelam.com.au
Resources Ltd
Marampa Iron Ore Project
Working with Sierra Leone to unlock potential
Tel: Fax: E-mail:
7MIVVE0ISRIGSYPHFIXLIRI[NI[IPMR%JVMGE´WGVS[R
)GSRSQ]SZIVZMI[-RGSQIGEXIKSV] low income+2-TIVGETMXE97 340
Ernest Bai Koroma, president of Sierra Leone
0 50 100 150 200
Ghana
Kenya
Sierra Leone
Regional average (sub-Saharan Africa)
Liberia
Guinea
Guinea-Bissau
Ease of doing business ranking
0 50 100 150 200
Ghana
Kenya
Sierra Leone
Regional average (sub-Saharan Africa)
Liberia
Guinea
Guinea-Bissau
Ease of starting a business ranking
How Sierra Leone and comparator economies rank on the ease of starting a business (above left) and doing business (above right) Source: Doing Business database
EDAL_1p_A4.indd 1 30/04/2013 08:16
Mining Journal special publication – Sierra LeoneJune 2013
Sierra Leone
7
is advancing its Komahun Gold Project in the Kono District in the Eastern
Region of Sierra Leone. Nimini is owned 90% by Polo Resources (AIM,
TSX: POL) [website: www.poloresources.com] and 10% by Plinian
Guernsey Limited. Plinian Capital Limited is the Operator of the project.
The Government of Sierra Leone awarded a Large-Scale Mining Licence,
encompassing an area of 100 km2, to Nimini in November 2012.
The global Indicated Mineral Resource, based on data as at 20 February
2012 and at a 1.8g/t cut-off grade, is 3.53Mt at a grade of 4.59 g/t for
521,000 ounces of gold, with a further 2.25Mt at a grade of 3.64 g/t for
263,000 ounces of gold in the Inferred category.
With an additional 57,600 meters drilled since the above Mineral
Resource Estimate (MRE), an updated global MRE will be published in
June 2013. This will be followed by the publication of a Preliminary
Economic Assessment (PEA).
The Licence is largely unexplored; the Komahun Deposit representing
some 10% of the total Licence area. Consequently the focus of
exploration over the coming months will be to undertake soil surveys,
trenching and pitting with the objective of defining targets for future
drilling. In this regard, the PEA for the Komahun deposit will be for the
ƐƚĂƌƚĞƌ ŵŝŶĞ with future capital efficient growth to be derived from
additional resources resulting from the regional exploration. from the regional exploration.
^ŝĞƌƌĂ>ĞŽŶĞĨŽĐƵƐĞĚĞdžƉůŽƌĞƌE/D/E/D/E/E'>/D/d;EŝŵŝŶŝͿ
but none of the mining services industries in any significant sense. In my view, it’s a mining boom waiting to happen but you need to get the explorers in as the reality is, if you don’t look, you don’t find, and if you don’t find, you don’t build.”
Diamonds were first discovered in Sierra Leone in the 1930s in Kono District in the east. The nation is renowned for the exceptionally high quality of its diamonds and the discovery of some spectacularly large stones. The largest diamond ever discovered was in February 1972, ‘Star of Sierra Leone’, weighing 969.8ct. Other major discoveries include the three stones discovered in 1996, weighing 188ct and 283ct, and the 500ct boart.
Before 2007, kimberlites were only known to exist in eastern Sierra Leone. However, major exploration by African Minerals (then the Sierra Leone Diamond Co) resulted in the discovery of a kimberlite in the Lake Popei pro-ject area in the south in 2007. This was the first kimberlite to be discovered in this part of the country. Elsewhere in the country, high-priori-ty targets with positive kimberlitic grains have been identified in the north, including Kamak-wie and Kabala. The company also exported a total of 18,071ct of alluvial diamonds with gross sales proceeds of US$8.5 million from the Kon-ama alluvial project in Kono.
The commissioning of a new 180t/h dia-mond treatment plant in 2012 by OCTEA Mining (Koidu Ltd) has seen a rapid increase in production figures from a monthly average of 10,000ct to 30,000ct. The total diamond export for 2012 was 541,166ct, valued at US$163.2 million, with an average price per carat of US$301.6. The total artisanal produc-tion was 245,831ct, valued at US$80.54 mil-lion, accounting for 49.35% of the total export. The total kimberlite production was 295,335ct, valued at US$82.66 million, representing 50.65% of total export. Export values for 2012 exceeded that of 2011 by 31.45%, an improve-ment of US$39 million.
African Minerals started production on its Tonkolili iron-ore project in the north in Q4, 2011. Tonkolili, with a JORC-compliant resource of 12,800Mt and a mine-life of over 60 years, is expected to be developed in a number of phases. The US$1.7billion develop-ment of Phase 1 is fully funded and is expected to produce 20Mt/y of direct-shipping iron ore at full capacity.
The next stage of project expansion now
contemplates producing up to 35Mt/y of 64% high-grade hematite concentrate and the expansion of the current port facilities at Pepel, expected to enter production in 2016. The company has also developed significant port and rail infrastructure to support the operation of the project, via its subsidiary Afri-can Rail and Port Services (SL) Ltd (ARPS), in which the Government of Sierra Leone (GoSL) has a 10% free carried interest. In March 2012, the company completed a landmark US$1.5 bn transaction with Shandong Iron and Steel Group (SISG) in return for a 25% shareholding in the Tonkolili project companies. The SISG transaction is the largest-ever foreign invest-ment in Sierra Leone and the largest single investment by a Chinese state-owned enter-prise in Africa. African Minerals Ltd produced a total of 5.1Mt of iron ore in 2012.
London Mining began production at Maram-pa mine in December 2011. Marampa was for-merly operated by the Sierra Leone Develop-ment Co and William Baird between 1933 and
1975. It reached a peak produc-tion of 2.5Mt/y in the 1960s before low iron-ore prices forced its closure. Continuing weak market economics, out-dated processing technology and civil war prevented redevel-opment of the mine for over 30
years, until the acquisition of the mining licence in 2006. London Mining started sales from the Marampa mine last year and expects to reach production capacity of 5Mt/y this year. The Marampa mine has estimated resource of over 1,000Mt of iron ore. A bankable feasibility study was completed in 2012 on an expansion plan to 9Mt/y and a prefeasibility study was completed in 2011 showing that Marampa has resources to support a staged expansion to over 16Mt/y. The company listed on London’s AIM on November 6, 2009. London Mining produced 1.5Mt of iron ore in 2012.
Coltan is viewed as the ‘new kid on the block’ on the Sierra Leone minerals landscape. The lucrative ore appears to have been derived from pegmatite veins within the granites, near the granite-greenstone belt contact. The allu-vial deposits are especially associated with streams draining the Sula Mountain-Kangari Hills schist belt and most recently the Loko hills and Kambui schist belts. A reasonable quantity of economic grade occurs in alluvial
“It’s a mining boom waiting to happen but you need to get the explorers in as the reality is, if you don’t look, you don’t find, and if you don’t find, you don’t build”
Doing business Doing business Change 2013 rank 2012 rank in rank140 148 8
Doing business 2013 Doing business 2012 Improvement in DTF*** (% points) DTF** (% points) DTF*** (% points)
53.4 51.5 1.9
June 2013Mining Journal special publication – Sierra Leone
Sierra Leone
8
gravels in various parts of the country, includ-ing Valunia chiefdom (Bo district), Sella Limba chiefdom (Bombali district) and the Bumbuna area. Little work has so far been done in explo-ration and exploitation of coltan. As such, no bedrock discovery has been made to date. Ellu-vial-alluvial Coltan exploitation is still rudimen-tary involving local miners scooping materials from hill slopes and sediments from stream beds and wash using basic tools like head pans and 3-5mm sieves. Coltan is sold locally to Chi-nese and European buyers at US$5/kg.
Amara Mining owns Baomahun, with 2.24Moz of indicated mineral resources and a further 0.54Moz of inferred mineral resourc-es. Reserve estimation is ongoing. The Baoma-hun deposit is a typical Archaean gold deposit in central Sierra Leone. Mining is expected to start in mid-2015.
Nimini Holdings Ltd is advancing its portfo-lio of gold exploration projects in Sierra Leone with the aim of progressing through feasibility to mine development and production. The company has two flagship projects: Nimini-komahun project; and the Matotoka project. The Nimini flagship project is an advanced-stage project with a Canadian NI 43 -101-com-pliant indicated resource of 521,000oz of gold and inferred resource of 263,000oz (SGS Can-ada estimate based on results to February 20, 2012). Nimini is targeting a further 500,000-700,000oz of gold resources to a depth of 600m in a 20,000m drilling programme.
The Matotoka project, on the other hand, is still in prospective stage with potential to host substantial gold mineralisation. Attractive geo-physical (versatile time domain electromagnet-ic; VTEM) survey and geochemical anomalies have been identified for follow-up projects.
Sierra Rutile’s mine, in the southwest, is one of the world’s largest natural rutile deposits, with a JORC-compliant mineral resource for measured, indicated and inferred resources for the Sierra Rutile mine of over 800Mt (as at August 31, 2012). Sierra Rutile operates a sin-gle bucket ladder dredge with a new dry min-ing project at Lanti, currently in the final stages of commissioning. It forecasts production of 30,000-35,000t/y. The next stage of its expan-sion strategy, Gangama Dry Mining, is forecast on completion to have an average annual pro-duction rate of 83,400t of rutile, 46,000t of ilmenite and 9,500t of zircon and other con-centrates over six years.
The feasibility study into Gangama Dry Min-ing is due for completion in Q2, 2013. In 2012, Sierra Rutile produced 94,493t of rutile,
achieving a 39% increase in production, versus the 67,916t in 2011. This translates into a profit of US$ 83.5 million for 2012.
Bauxite has been mined in Sierra Leone since 1965 by Sieromco, a subsidiary of Alu-suisse. Alusuisse suspended operations in Jan-uary 1995 due to civil unrest. In 2001, Sierra Rutile, a subsidiary of Titanium Resources, acquired the assets of Sieromco from Alusui-sse and was granted an exploration licence. Subsequently, Sierra Rutile assigned the explo-ration licence to Sierra Minerals Ltd and min-ing operations formally started in November 2005. Since July 2008, Sierra Minerals has been part of the international industrial and invest-ment group Vimetco NV. Sierra Minerals, the country’s only bauxite mine, is also the sec-ond-largest mining employer. The mine con-tains an indicated washed reserve of 12.478Mt of bauxite ore containing 53.1% Al2O3 with 3.9% SIO2 and an inferred washed reserve of 20.110Mt of ore containing 49% Al2O3 with 3.6% SIO2. It currently produces around 1.2Mt/y for export. The company produced 776,000t of bauxite in 2012.
It is clear that, while the mining sector has kick-started Sierra Leone’s economic develop-ment, there is still a huge amount of untapped potential in the sector.
The Metals Economic Group Strategic Report cites Sierra Leone among the lowest exploration activity in West Africa and McGloin believes that, for it to expand, the government has to encourage it by ensuring that every dollar goes into the ground rather than ending up as tax revenue.
He says: “You don’t have to be clever to encourage exploration – if you look at Burkina Faso, for example, they have moved very quickly up the inward investment trajectory by making sure that they didn’t put a lot of taxes on mining services and consultancy. To an extent, the government in Sierra Leone recog-nises this, but the current tough macro-eco-nomics mean that, right now, it’s a tough mar-ket to be an explorer in.” He adds: “On the upside, security is a very low worry here. Sier-ra Leone is a very easy place to work – the infrastructure is a challenge but I don’t worry about my geologists out in the field.”
Mike Jones, global head of business develop-ment and investor relations at African Miner-als. agrees: “The country has changed a great deal over the last few years. There have been three peaceful and democratic elections since the end of the civil war and the government has shown strong support for foreign direct
%JVMGER1MRIVEPWERRSYRGIWRI[JMRERGMRKEVVERKIQIRXWAfrican Minerals has agreed new financing arrangements with Standard Bank. A US$250 million secured loan facility structured to be capable of being increased to fund subsequent expansion to 35Mt/y and a corporate-level revolving credit facility of US$100 million for general corporate purposes. Miguel Perry, chief financial officer of African Minerals, says: “I am delighted to report that the facilities we outlined in December have now been approved, and am especially pleased that Standard Bank continues to be a cornerstone lender. These facilities provide us with incremental financial flexibility through the project ramp-up period, as well as a potential source of funding for the next phase of our expansion to 35Mt/y.”
7MIVVE0ISRIGPMQFWIMKLXTPEGIWMRXLI;SVPH&ERO´W(SMRK&YWMRIWWVITSVXSierra Leone’s global ranking for ease of doing business has improved from 148 in 2012 to 140 in 2013, according to figures released by the World Bank. The factors that have triggered this uplift are the ease of registering property, which has risen by three, the ease of getting credit (up by 44), the ease of trading across borders (up by one), and the ease of resolving insolvency (up by three).
-1*WXVIRKXLIRMRKKVS[XLMRWYF7ELEVER%JVMGEThe IMF has reported that the near-term outlook for sub-Saharan Africa (SSA) remains broadly positive, with growth projected to accelerate modestly to around 5.5% in 2013-14, following a year of strong growth in 2012. These favorable prospects partly reflect the gradually improving outlook for the global econo-my, while locally, investment in export-orientated sectors is an important driver of growth going forward. The report also shows that economic growth in SSA remained strong in 2012, with regional GDP increasing by 5%. Growth was particularly strong among oil exporters and low-income countries, while middle-income countries with closer ties to Europe saw a deceleration. The smaller fragile states still lagged behind relative to the regional average, and civil unrest was a drag on growth in a few countries. Inflation declined in most of the region, reflecting moderation in the movement of global commodity prices, improved local climate conditions, and tight monetary policy.
7MIVVE0ISRIRI[WMRFVMIJ
Amara Mining’s Baomahun project
Mining Journal special publication – Sierra LeoneJune 2013
Sierra Leone
9
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investment. African Minerals and the govern-ment have demonstrated that a major mining project can be initiated, developed and con-structed and be in steady production within 36 months of granting a mining lease.”
McGloin says: “I’d expect investment to start coming in from the UK, Canada and Australia. Once finance becomes available, I think we’ll see juniors and mid-tiers coming in. I don’t think the majors are active in Sierra Leone at the moment, but once the juniors have done the trail-blazing, they are bound to follow.”
Both McGloin and Jones saw infrastructure as being the key challenge for mining companies coming into Sierra Leone. Jones says: “The lack of infrastructure has been exacerbated in Sierra Leone by the lengthy civil war and the rainy sea-son. In real terms, this has an impact on the workforce as well, since the war deprived many young men and women of an education and destroyed national assets and institutions. This has had a significant impact in terms of high unemployment and a real skills shortage.”
McGloin believes the solution to the infra-structure issue lies in hydropower. He says: “There is a phenomenal opportunity to devel-op hydropower. The country has abundant water and mobile technology means that, rath-er than having a massive grid, you could start with small hydro-electric plants linked with mobile technology and I can think of three or four towns that you could get up and running pretty quickly.”
Jones adds: “There is a hydroelectric dam at Bumbuna near our mine and work has begun on finding investment for this hydroelectric upgrade project and we will do whatever we can to help promote this initiative.”
On the positive side, McGloin has found dealing with the government very positive. He says: “I’ve found them very co-operative and ministers are always ready to make a meeting. I think the move to the NMA is quite a good one. They have put it all together under one roof and have hired people who have worked in industry as well as civil servants, so they have bought a bit of commercial nous.”
Jones also thought the move to be a good one. “We welcome any measures to increase transparency in the sector and the NMA should help Sierra Leone acquire EITI inclu-sion, which will have benefits for us as an operator in the country. That said, we do not expect it to have any material impact on our operations.”
Everyone we spoke to was very positive about the future for Sierra Leone’s mining sec-tor and the impact that it would have on the country as a whole.
Jones says: “I believe Sierra Leone stands on the cusp of a period of rapid economic growth and further investment driven by the mining sector.”
McGloin was even more enthusiastic: “Giv-en where it has come from, Sierra Leone has bounced back very strongly and I get the feel-ing most people want to see the country on a firm footing. The wonderful thing is that they have one of the most fertile countries I have been to in Africa and they are so well placed to get electricity provision up and running very quickly. Once you have electricity, you have rapid development. If Sierra Leone manages to harness all its natural resources – not just min-erals but agriculture and electricity – it will be breathing down the neck of a place like Côte d’Ivoire, which is one of the jewels of Africa.”
It is clear Sierra Leone is a country that bears watching. The geology is right, the peo-ple are easy to work with, it has put in place a mining-friendly code and a new streamlined government body to work with the mining community. It is a very real possibility that what we are watching is the birth of one of Africa’s rising stars.
“If Sierra Leone manages to harness all its natural resources – not just minerals but agriculture and electricity – it will be breathing down the neck of a place like Côte d’Ivoire, which is one of the jewels of Africa”
June 2013Mining Journal special publication – Sierra Leone
Sierra Leone
10
The management of the minerals sec-tor in Sierra Leone has been trans-formed to ensure it delivers the max-
imum possible benefits for the country and its people. A key step in this transformation is the creation of the National Minerals Agency (NMA) as a professional organisation serving the minerals sector.
The transformation process has also brought about the transferring of the functions and responsibilities of the former Government Gold and Diamond Office to the NMA, which is now the Department of Precious Minerals Trading. The aim is to institute more effective measures in the marketing of gold and dia-monds by ensuring that precious minerals val-uation and trading is done with the highest standard of professional competence and integrity, thereby ensuring a more credible industry with increased benefits to the people of Sierra Leone.
The core functions of the Department of Precious Minerals Trading within the NMA are the valuation and certification of gold and dia-
monds for export purpose, and the collection of taxes levied on such exports.
(MEQSRHI\TSVXWExport of diamonds from Sierra Leone is con-sistent with the Kimberley Process Certifica-tion Scheme (KPCS), which the country adopt-ed in 2000 – the first country to adopt this scheme. The KPCS is a regulatory mechanism, backed by a UN resolution, and covers all dia-mond producing and manufacturing countries.
It stipulates that all diamonds in the inter-national market must be accompanied by an authentic KP Certificate from a KP member
state, and makes non-compliance a criminal offence. The aim of the KPCS is to curb smug-gling and the trade in conflict or blood dia-monds.
The adoption of the KPCS has helped the development and management of the diamond industry in Sierra Leone considerably. Since the scheme was introduced in 2000, there has been a steady increase in the total value of dia-monds exported from Sierra Leone, as reflect-ed in the table below. Before 2000, the com-bined effect of the civil conflict and the lack of proper management of the minerals sector deprived the government of considerable rev-enue from its minerals resources. By 2000, however, the conflict had subsided, and with the adoption of the KPCS, the total value of diamond exports rose from US$1,244,825 in 1999 to US$28,022,492 in 2001, and by 2006, the export value had risen to US$141,940,243.
+SPHXVEHIThe trade in gold also witnessed a steady year-ly rise between 2008 and 2010, with export volume rising from 105kg in 2008 to 166kg in 2009, and a record 270kg in 2010. This trend, however, suffered some reversal when a 5% export duty was imposed in 2011.
Nevertheless, it is encouraging that revenue generated from gold could now be properly accounted for, which was not the case before 2008. The table below indicates yearly gold export between 2008 and 2012.
The NMA is working towards developing and implementing a beneficiation service, by setting up a chemical/mineralogy laboratory, which will enable dealers of precious minerals to add value to their minerals. A security sys-tem that meets international standards will also be designed to control precious minerals movement, certification, exportation and to combat fraud-related activities.
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2008 105.64 3.40 2.418 7,143.43 201,539.6 712.012009 166.74 5.36 4,280 14,500.80 356,646.0 798.242010 270.27 8.69 8.729 34,445.34 727,379.9 1,004.412011 167.15 5.37 6.395 27,512.07 532,890.2 1,189.792012 141.02 4.53 5,740 24,694.75 478,346.8 1,265.87Total
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1 EC 41 50,122 1,611.63 2.1070 9,063.0 36.702 Lebanon 10 35,016 1,125.91 1.3780 5,926.0 24.003 UAE 26 20,616 662.88 0.8440 3,638.0 14.734 USA 28 16,346 525.59 0.6730 2,893.0 11.725 China 6 13,385 430.37 0.4990 2,142.0 8.676 Senegal 3 3,777 121.46 0.1580 679.9 2.757 Turkey 2 650 20.91 0.0299 128.1 0.528 S Korea 2 631 20.29 0.0297 127.4 0.529 Canada 1 258 8.29 0.0117 50.5 0.2110 Sri lanka 1 99.9 3.21 0.0470 20.2 0.0811 Gambia 1 86.3 2.77 0.0424 18.2 0.0712 Russia 1 38.3 1.23 0.0180 7.7 0.03
Totals 4,534.54 100
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1 Switzerland 15 295,369 82.683 50.662 EC 141 227,062 74.248 45.503 UAE 30 9,550 2.896 1.774 USA 28 1,449 1.211 0.745 Israel 20 2,983 1.207 0.746 India 3 3,649 0.305 0.197 S Africa 8 152 0.235 0.148 China 4 400 0.206 0.139 Armenia 1 147 0.077 0.0510 Canada 2 90 0.052 0.0311 Bangladesh 1 279 0.046 0.0312 Indonesia 1 11 0.022 0.01
13 Croatia 1 24 0.009 0.01Cancelled 2 – – –
Totals 100
“Export of diamonds from Sierra Leone is consistent with the KPCS”
NMA Director General Sahr Wonday
1p_SRL.indd 1 20/05/2013 12:59
The name OCTÉA is well known in Sierra
Leone, having become associated with the
concepts of responsible mining,
employment, growth and development.
Since 2003, the shareholder of Koidu
Holdings, Beny Steinmetz Group
Resources Ltd (BSGR) has invested over
$300 million into the development of the
Company and the upliŌment of our
communiƟes. Inspired by the success of
Koidu and Tonguma, a major restructuring
exercise was iniƟated towards the end of
2011 to enable the group to invest in
other exploraƟon and development
opportuniƟes in Sierra Leone.
OCTÉA Mining Ltd owns the mining
assets of the group, including the
Koidu Diamond Mine, previously called
the Koidu Kimberlite Project, held by
Koidu Limited, which was formerly
Koidu Holdings.
OCTÉA Diamonds is the markeƟng arm of
the group; it takes diamonds from OCTÉA
Mining and cleans, sizes, classifies and
parcels them for sale to our internaƟonal
customers. We are pleased to have signed
an exclusive sales agreement with leading
internaƟonal jewelers, so we can control
the enƟre chain of custody from the mining
source to the diamond parcel sale.
This guarantees that all OCTÉA diamonds
sold to manufacturers comply with the
Kimberley Process CerƟficaƟon Scheme.
Our growth will mean that we need more
administraƟve, financial and logisƟcal
support, so we have created OCTÉA
Services, a company that will centralise
these funcƟons.
The OCTÉA FoundaƟon, important from
a local community and government
perspecƟve. It will now run our ‘Diamonds
doing Good’ iniƟaƟve, and promote these
acƟviƟes through partnerships and
addiƟonal funding from other sources
who wish to support our community
development programmes.
Building on our vision and hard work, our
young company has shown great promise;
this has been recognised by our
customers, suppliers and other partners.
The group's flagship Koidu diamond mine,
recently expanded producƟon capacity
with a 180 tph processing plant which will
boost the mine's diamond output from
10 000 to 45 000 carats per month.
The mine employs over 1 300 staī,
89% of whom are Sierra Leoneans.
Contact Details: 84 Wilkinson Road,
Freetown, Sierra Leone.
T: +232 78 874 912, F: +232 22 230 476,
Email: [email protected]
OCTÉA Limited– reflects and honours the prized octahedral (eight-sided)
diamonds that are so proudly characterisƟc of Sierra Leone’s kimberlite deposits.
RFWHDBOWGBDBVXSSODL30
Mining Journal special publication – Sierra LeoneJune 2013
Sierra Leone
13
7YWXEMREFPIHIZIPSTQIRXMREGXMSR
Sustainable development are words that are almost ubiquitous when talking to modern miners, but too often they are
refer exclusively to community engagement and development programmes.
Mining Journal talked to Graham Foyle-Twin-ing, Global Head of Sustainable Development and HR at African Minerals, about how the company is putting sustainability into practice. Foyle-Twining says: “Fortunately, gone are the days when extractive industries worked all over the world and there was little attention paid to what the mining legacy would be.
“Now, responsible operators work to glob-al principles laid down by international bodies such as the International Council of Mines and Metals and the UN, and there is a real focus on the absolute necessity to deliver a sustainable mining legacy to the country in which you operate.” This is true globally, but is particu-larly relevant in Sierra Leone, with its recent history of civil war.
Foyle-Twining says: “Sierra Leone has its own challenges. In reality, there has been little economic development on the back of the civil war, so there is significant unemployment, lim-ited infrastructure and a focus on subsistence farming. African Minerals has tackled the infra-structure by building a sophisticated mine rail-way line and a port facility but our biggest chal-lenge has been building a workplace culture.
“Many of our employees are coming into their first real job in their early 30s with limit-ed or no exposure to working within a struc-tured environment. Therefore, employee rela-
tions can be challenging, but certainly not insurmountable. The people of Sierra Leone are very resilient and are adapting very quickly to a new way of work in our industry.”
He adds: “Many of our staff haven’t as yet grasped the true concept of collective bargain-ing, so there are no real formal negotiating processes with the workforce as a whole; matters tend to be on an ad-hoc basis.”
Foyle-Twining qualifies this: “That said, working with the Sierra Leonean people is hugely satisfying. There is no real complexity and people are enthusiastic for the opportunity to work and develop new skills. In fact, one of our challenges is align-ing expectation to the reality of what can be delivered in a realistic time line.
“African Minerals is the big-gest employer in the country, but the reality is that our capacity to employ is limited so we do have to make sure we partner with the Govern-ment and other agencies to assist in evaluating other employment opportunities – through activities such as new forms of locally operated larger-scale agricultural and small- to medium-sized enterprise development, focused on second-ary and tertiary economic pursuits.”
Foyle-Twining is clear that the key to the success of African Minerals is that the company
is focused on proceeding in the right direction. He stressed to Mining Journal that there is no new approach. As part of the transition from explorer to producer, the company put in place the infrastructure for the mine in record time and while around 5,000 staff are recruited permanently, during the construction phase, around 15,000 contract and permanent staff were employed.
In the last quarter of 2012, African Minerals engaged ERM to perform a social baseline
study across the footprint of the company’s opera-tions, from which a strate-gic and robust sustainabili-ty framework is being developed to be rolled out across the business.
He says: “The mine infrastructure was com-pleted in record time and the timing for the social baseline study was impor-tant as completing that study set us up to run the operation in a steady state of business. If we hadn’t put in place the baseline
study, it would have made it very difficult for us to understand the footprint of our opera-tions and the impact we would have in the area.
“We needed to absolutely understand who are the communities, and our ability to engage them in the provision of a sustainable legacy. So, in real terms, the baseline diagnostic study across the business will be translated into pol-icies and processes at a strategic level as well as the implementation of technical perfor-mance standards as part of the tactical imple-mentation of a Sustainable Development Poli-cy Framework.”
Cognisant of how developing economies’ natural resources can be a powerful engine for inclusive economic growth and social transfor-mation, African Minerals believes it has a sig-nificant role to play in working collaboratively with the Government of Sierra Leone to lev-erage its natural-resource endowment to cre-ate a better future for the nation beyond the company’s direct revenue and royalty pay-ments.
Mining Journal talks to Graham Foyle-Twining about how African Minerals is putting sustainability at the core of its operations
“African Minerals is the biggest employer in the country, but the reality is that our capacity to employ is limited so we do have to make sure we partner with the Government and other agencies”
Graham Foyle-Twining
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Vimetco Sierra Mineral Holdings 1 Ltd
Vimetco Sierra Mineral Holdings 1 Limited was established in July 2008, when it acquired the bauxite mine in Sierra Leone.
The bauxite mine, established around 60 years ago, has been in operation intermittently, due to various factors.
The bauxite is of a very high grade of alumina, with low levels of silica, and is mined from several quarries within a 20km radius from the Gondama site. The site houses the offices, workshops and washing plant. The bauxite is transported to the Nitti Harbor, on the banks of the Sherbro River, and is then transported by barge to ships anchored in the ocean, for export to the parent company in Vimetco for smelting.
Since the arrival of Vimetco, the company has undergone a metamorphosis, establishing its own identity. This is evidenced by the management of the mine comprising a mix of South African, Sierra Leonean and Romanian personnel, giving it an international identity. It is the first mining company in Sierra Leone to have a woman at the helm – Lola Trollip. Sierra Minerals also has more than 500 Sierra Leonean workers in various positions.
Sierra Minerals operates within the various chiefdoms within the area. The largest is that of Paramount Chief Tommy M Jombla, of the Upper Banta Chiefdom. Surface rent payment in excess of Le530 million were made to the various landowners at a meeting held on April 9, 2013, in the Rutile Social Hall in Moyamba Town. The meeting was attended by top government officials, such as the deputy minister and the director of mines and mineral resources, and local government officials.
7KHORFDOFRPPXQLW\Sierra Minerals, led by its community affairs manager, Anthony Smith-Sam, has also contributed to the communities through other social initiatives. The SMHL Foundation, in conjunction with the communities, carries out various projects to improve the lives of the communities. These initiatives include school classrooms, water wells, toilet facilities and educational bursaries.
The personnel at Sierra Minerals are also encouraged to participate in activities in order to build better relations within the company. The 52nd Independence Day was celebrated by jointly holding a Sports Day with Sierra Rutile. All employees and management were divided into the various teams, and were encouraged to participate in the Sports activities.
Sierra Mineral Holdings 1 Limited has various projects and plans for expansion, and is currently carrying out numerous exploration activities.
Sierra Minerals has been part of the international industrial and investment group, Vimetco NV, since July 2008. Sierra Minerals is the only bauxite mine in Sierra Leone and is the second-largest mining employer in the country. The mine has a resource base of around 31Mt of bauxite and currently produces around 1.2Mt/y for export.
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Contact
Vimetco NV, Rivergate Center, No. 64, Splaiul Unirii040036 Bucharest District 4, RomaniaTel: +40 (0)21 408 35 00 Fax: +40 (0)21 408 35 82Contact: Serghei GheorgheE-mail: [email protected]
1p_SierraHoldings_profile.indd 2 29/05/2013 12:05
Mining Journal special publication – Sierra LeoneJune 2013
Sierra Leone
15
EGD:TSX-V
ENERGOLD DRILLING GROUPEnergold and its subsidiaries have experience drilling in diverse terrains throughout the globe from remote grassroots projects to exploration infi ll and mine extension programs providing a robust service with well supported drilling operations, highly experienced project managers and drill crews. Please contact the numbers below for further service information, budgets or outline proposals for your drill programs.
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CALL: +44 1926 338 469 Europe, Middle East and Africa
+ 1 604 681 9501 North / South America, Asia
EMAIL: [email protected] · WWW.ENERGOLD.COM
7OMPPWHIZIPSTQIRXOne example of the way that African Minerals is taking the lead in this sphere is the work it is doing with the government around skills development. In 2012, African Minerals formed a partnership with the government to address the growing need to raise educational standards in the country. A steering commit-tee was formed of African Minerals sustainabil-ity team, the Minister of Education and col-leagues within the ministry, the Minister of Mines and representatives from universities in Sierra Leone.
The role of the steering committee is to explore the skills development for the busi-ness and country and empower them to take advantage of increasing private-sector invest-ment available. Foyle-Twining says: “We feel it was critical to work in partnership with these bodies to ensure that capable talent is available to support our business needs and those of Sierra Leone. We do acknowledge it is the government’s responsibility to govern and make sure the right infrastructure, the right education and the right security is in place in the country. However, as a mining company, I believe it is our role to support the govern-ment in its efforts. It is a shared vision so, for example, African Minerals would support funding of education development but will not provide education.”
In this context, African Minerals is discuss-ing with the steering committee translating the
on-the-job training and development that it offers its employees into a recognised certifi-cation that is, in a sense, the African Minerals ‘kitemark’.
Foyle-Twining is clear that African Minerals is seeing its sustainable development strategy as core to the way that it runs its operations. He says: “We are doing this in a reasoned, bal-anced way. It is not our intention to make a big splash around our community projects. Sus-tainable development is about the way we do business and our primary objective is to leave a sustainable legacy for the future.”
Pragmatically, this is a sensible approach as a company’s social licence to operate is abso-lutely linked to its sustainability strategy. The government is looking to companies like Afri-can Minerals to be a major contributor to developing small business and the infrastruc-ture within the country.
Foyle-Twining admits it is both a pragmatic and ethical position, “failing to have a robust sustainability programme would have an impact on how other stakeholders, including our shareholders and the wider financial com-munity, view our company. An investment in an exploration company is a long-term invest-ment and for an investor to feel that their portfolio is fairly well managed, you need to be seen to be operating responsibly and sustain-ably. In real terms, it’s a pretty simple business case that offers a significant uplift when you engage the investor community. A successful operator is one that can make a healthy return for its investors while also adhering to the highest international standards of social and environmental protection”
The message is clear: a strong focus on sus-tainable development is good for business. It is a win-win scenario where the community benefits and so does the company and, as the biggest employer in the region, African Minerals is well placed to develop the blueprint for success.
0SRHSR1MRMRKTSWXWVIGSVHJMKYVIWJSV1EVEQTE
At the end of Q1, 2013 production of iron-ore concentrate was 706,000wmt, 29% up on the previous quarter and sales stood at 589,000wmt, which was over 50% more than the previous three months. Graham Hossie, chief executive of London Mining, says: “London Mining has made an excellent start to 2013 and we are pleased to announce record production and sales volumes in the first quarter. We are well advanced with the next stage of expansion to achieve a run rate of 5Mt/y by the end of the second-half of this year and are reviewing high return opportunities for the further development of Marampa.
“As part of a programme of continuous improvements throughout our business, we are increasing logistics capability, implementing our cost optimisation plan and are reviewing key areas of margin improvement including progressive reduction of FOB costs below US$50/dmt, improved FOB pricing from reduced ocean freight and reduction of our overall overheads. We are moving forward at Isua where we are encouraged following our initial engagement with the new Government of Greenland and continue to expect completion of the exploitation permitting process in 2013.”
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Marampa
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Sierra Rutile Ltd
In 1962, the potential of Sierra Leone’s substantial natural rutile resource had only begun to be recognised. Today, its JORC-compliant resource, of over 600Mt at 1.29% rutile, makes it one of the largest natural rutile deposits in the world; and Sierra Rutile Ltd, the company operating the resource, has emerged as one of the world’s leading producers of heavy minerals.
Based in Sierra Leone, with a work force that is over 95% Sierra Leonean, AIM-listed Sierra Rutile is presently engaged in a major expansion of its rutile production.
The first stage – a new dry mining operation at Lanti – has been successfully commissioned. A second dry mining operation at Gangama, which will see the company’s production profile increase to around 200,000t of rutile in 2015, is at the feasibility study stage. Additionally, a scoping study, which provides a good basis for a long-term increase in production, was completed on dredge mining of the Sembehun deposit.
Natural rutile – Sierra Rutile’s core product – is one of the titanium dioxide minerals (TiO2), used in the manufacture of white pigment for paint, plastics and paper. It is a high-grade feedstock, which means the manufacturing of pigment from rutile is more efficient, more environmentally friendly and less costly. It also produces by-products of ilmenite, a lower-grade pigment feedstock and zircon, used in the global ceramics industry.
7KHORFDOFRPPXQLW\The company has a strong relationship with the surrounding communities, and works to ensure that all stakeholders, not just shareholders, benefit from its success. Its medical facility treated over 22,000 people last year, and offered free health education, mosquito nets for the prevention of malaria, and HIV testing.
The Sierra Rutile Foundation, set up and funded by the company, provides support and funding for projects such as school buildings, court house construction, the creation of a local radio station, grain storage construction, sanitation development, well drilling and the donation of generator sets to local health clinics. It also supports a local technical college, which provides training to over 300 students.
65/DQGWKHHQYLURQPHQWSierra Rutile is committed to the preservation of the environment and to the continual rehabilitation of disturbed areas. In 2011, a full survey of all disturbed lands from the past 45 years formed the basis of a legacy mine disturbance rehabilitation plan to be implemented over six years.
The company rehabilitated 141ha of disturbed land last year, 20ha above its target.
7KHIXWXUHThe company has increased its annual exploration capacity to more than 50,000m and expanded its in-house laboratory to complement the exploration upgrade. Combined with the recent approval of two new exploration licences by the Sierra Leone Ministry of Mines and Mineral Resources, Sierra Rutile is poised to capitalise on all opportunities to expand its already world-class deposit.
Sierra Rutile is a leading mineral sands company, operating world-class assets in Sierra Leone. Sierra Rutile is in the process of significantly expanding its core rutile production, with associated increases of zircon and ilmenite by-products. Sierra Rutile’s core product is rutile, one of a group of titanium dioxide minerals (TiO2), predominantly used in the manufacture of white pigment. Rutile, as well as other TiO2 minerals, are used in the pigment industry, due to their particularly high brightness and opacity characteristics.
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ContactSierra Rutile Limited (AIM:SRX)30 Siaka Stevens Street 2nd Floor, Access Bank Building FreetownSierra Leone, West AfricaE-mail: [email protected]
1p_SRL_profile.indd 2 30/05/2013 14:21
Mining Journal special publication – Sierra LeoneJune 2013
Sierra Leone
17
8MKLXQSRIXEV]TSPMG]VIHYGIWMRJPEXMSRFigures published by the OECD in May 2013 attribute reduced inflation to the tight monetary policy that accompanies robust economic growth driven by the mining sector. Inflation has dropped from 18.5% in 2011 to 11.6% in 2012 and is projected to return to a single-digit 7.1% in 2013 and 6.9% in 2014 as agricultural production recovers and international food prices fall. The government has implemented several reforms to contain inflation and has taken appropriate monetary policy measures. Policies to strengthen fiscal discipline in 2012 have helped to reduce the fiscal deficit from 4.5% of GDP in 2011 to 1.8% in 2012, and is projected around 2.3% in 2013 and 2% in 2014. The current account deficit as a percentage of GDP has also been reduced from 52.3% in 2011 to 44.0% in 2012 as a consequence of an expansion in the minerals and cash crop exports. It is projected to shrink to 11.6% in 2013 but to slightly increase to 12% in 2014. The restrictive fiscal and monetary policies contributed to a reduction in the govern-ment expenditure and thus the domestic debt burden. This has been supported by strong reforms aimed at fighting corrup-tion, improving the ease of doing business in Sierra Leone and reducing poverty. The Poverty Reduction Strategy Paper is being succeeded by a new strategy called Agenda for Prosperity 2013-17, which aims to scale up inclusive green economic growth, employment and value addition to productivity in various sectors and to accelerating progress towards the Millennium Development Goals.
'LMREXSMRZIWX97FROn May 10, 2013 the Ministry of Mines and Mineral Resources signed a Memoran-dum of Understanding with China Kingho Energy Group Co Ltd that will result in more than US$6 billion, and possibly as much as US$10 billion, in inward invest-ment into the mining sector. Part of this money will be put towards constructing a deepwater port and it is expected there will be significant infrastructural as well as economic advantages to this agreement.
7YRIVK]KISPSKMWXXSWYTIVZMWIXIWXWEX4EQTERE6MZIVSunergy announced in May it has initiated a re-testing programme under the supervision of a geologist which will result in assays and mineralogical information that will qualify for publication in a CNI 43-101-compliant report establishing resources and reserves.
7MIVVE0ISRIRI[WMRFVMIJ8LI21%TVMZEXIWIGXSVTVEKQEXMWQMRETYFPMGFSH]
The mining sector in Sierra Leone is set to grow significantly in the next dec-ade with many opportunities in the
field for exploration and mining for minerals such as diamonds, iron ore, gold, rutile, bauxite, among other resources, and the Government of Sierra Leone has taken major steps to en-sure proper management of the sector, moti-vated by the desire to provide an attractive investment climate, while at the same time en-suring optimum revenue for the State.
One such step is the establishment of a National Minerals Agency, as a technical regu-latory body to promote the development of the mining sector. According to the Minister of Mines and Mineral Resources, Minkailu Man-saray, the timely establishment of this modern agency in line with international best practice is a critical part of the reform programme of the Government of Sierra Leone to ensure proper management of the valuable natural resources that are the country’s best hope for economic development and poverty reduction.
The Government of Sierra Leone has already made great improvements to policy with the Mines and Minerals Act 2009, and the development of draft regulations for mining operations, precious-minerals trading and environmental and social issues. The establish-ment of the NMA represents further positive change that will complement improved regula-tions with improved capacity for implementa-tion of these regulations.
Staffed by qualified and competent profes-sionals, the NMA operates as a world-class professional and technical regulatory organisa-tion working with the Ministry of Mines & Min-eral Resources to serve the mining sector and its communities, and ensuring optimum reve-nue for Sierra Leone from mineral resources.
For example, the Director General of the agency is a trained and qualified mining engi-neer, with over 30 years’ experience in mining with the private sector. “With my experience in mining and private sector background, I am aware that companies prefer to operate in an environment where they are assured of fair, predictable and consistent application of rules
and regulations that are clearly understood by all stakeholders,” he maintains. Thus, a key advantage of the NMA is that it is an agency with technical staff that can interact with com-panies on a professional basis.
As a semi-autonomous body, the NMA will ensure a fair and predictable implementation of minerals sector policy. The mission of the agency is to operate as a world-class profes-sional and technical regulatory organisation, serving and developing Sierra Leone’s mining sector and local communities.
The key functions of the agency are to facil-itate the development of the minerals sector and to administer and enforce the Mines and Minerals Act 2009, the (pending) Precious Minerals Trading Act and related regulations.
)JJIGXMZI+ISPSKMGEP7YVZI]With the transfer of the Department of Geo-logical Surveys from the Ministry of Mines and Mineral Resources to the NMA, the agency now takes the lead to facilitate exploration and investment activities by overseeing the collection and storage of all geoscience inform-ation (including geological mapping) for the nation, and promoting investment through the provision of comprehensive and accurate existing and historical geological information. The agency is already collecting and collating all existing data to create a database, which will be augmented to provide information online that can form the basis for further exploration.
1MRIVEP6MKLXW1EREKIQIRXGood governance of the mining sector is criti-cal to attracting the right kind of investment and ensuring that the sector contributes towards increasing economic development and reducing poverty in Sierra Leone.
The NMA has committed itself to managing a fair, predictable, and transparent mineral rights licensing system including monitoring and compliance. It will ensure that companies issued mineral rights have the necessary tech-nical and financial capabilities and plans to operate.
June 2013Mining Journal special publication – Sierra Leone
Sierra Leone
18
Supplement edited in London based on material supplied by JIC Media (www.jic-media.co.uk) Special thanks to: NMA, A.R. Wurie, the late Jonathan Sharkah, Mustapha O. Thomas and A. Toronka
/I]GSRXEGXW
7MIVVE0ISRI'LEQFIVSJ'SQQIVGI5th Floor, Guma Building, Lamina Sankoh Street, FreetownTel: +232 33 420222)[email protected]
7MIVVE0ISRI-RZIWXQIRXERH)\TSVX4VSQSXMSR%KIRG]¯70-)4%OAU Drive, Tower Hill, Freetown, Sierra LeoneTel: +232 33 991593;IFWMXIwww.sliepa.org
1-2-786=3*1-2)7%2( 1-2)6%06)7396')71MRMWXIV´W3JJMGIAlhaji Minkailu MansarayMinister of Mineral Resources5th Floor, Youyi BuildingBrookfields, FreetownTel: +232 76 434512)[email protected]
(ITYX]1MRMWXIVHon. Abdul Ignosi Koroma5th Floor Youyi BuildingBrookfields, Freetown.Tel: +232 76 323509)[email protected]
4IVQERIRX7IGVIXEV]Mrs Fatmata Mustapha 5th Floor, Youyi BuildingTel: +232 76 601492)[email protected]
The National Minerals Agency, 13 Wilkinson Road8IPSJJMGI +232 79 250702)[email protected]
(MVIGXSV+IRIVEPSahr Wonday Tel: +232 76 601299)[email protected]
(ITYX](MVIGXSV+IRIVEPMatthew Tarawali Tel: +232 76 338225)[email protected]
(ITYX](MVIGXSVSJ1MRIWPeter Bangura, c/o The National Minerals Agency (address above)Tel: +232 33 515985)[email protected]
(MVIGXSV+ISPSKMGEP7YVZI]Arnold Mason Tel: +232 76 660980)[email protected]
(ITYX](MVIGXSV+ISPSKMGEP7YVZI]Prince Cuffey Tel: +232 79 999980)[email protected]
(MVIGXSVSJ4VIGMSYW1MRIVEPW8VEHMRKJinnah Ibrahim Tel: +232 76 601 541)[email protected]
(MVIGXSVSJ*MRERGIERH%HQMRMWXVEXMSRJohn Fornah Tel: +232 76 601592)[email protected]
2%8-32%01-2)6%07%+)2'=
A world-class mining cadastre system is already fully operational and it maintains the register of mineral rights, mineral rights appli-cations, the cadastre survey map of mineral rights and mineral rights applications and a record of all minerals sector revenues. Most of this information is available online, for potential investors to review.
The process for mineral rights application has been streamlined and a simplified licence management and reporting guide is being devel-oped for potential investors and mineral rights holders. Investors are now assured of a speedy turnaround time for licence applications and customer friendly support from the NMA.
At the same time, the NMA strives to ensure that the mining sector develops responsibly and plays its part in promoting the rights of communities and protecting the envi-ronment. The agency oversees exploration and mining activities, ensuring they are con-ducted in a responsible manner and comply with the laws and regulations of the country. As the President of Sierra Leone, His Excel-lency, Dr Ernest Bai Koroma, noted while launching the agency in March 2013, “working closely with the Ministry of Mines and Mineral Resources, the NMA will support agreements the mining companies make with the commu-nities that host their operations, ensuring that there is participative sustainable develop-ment.”
*EMVERH'SQTIXMXMZI4VIGMSYWMineral TradingResponsible for overseeing the trade in pre-cious minerals, the NMA implements and oversees a system of diamond trading that is consistent with the Kimberley Process Certifi-cation Scheme, and has pledged to reduce and
eliminate illicit mining and trading activities.Steps have already been taken to regulate
the trading of precious minerals through draft-ing of the Precious Minerals Trading Act, which the NMA will ultimately enforce. It will also support the development of a beneficia-tion industry in Sierra Leone as investment in this new sector increases when the law is enacted.
The principles that underpin the new insti-tutional model for Sierra Leone’s minerals sec-tor are built on best practice in minerals sec-tor governance and public-sector reform from around the world. Similar models have been demonstrated to deliver better-managed min-erals sectors in other countries including a number of African countries.
As such, the agency will enable the Govern-ment of Sierra Leone to better focus on its core function of economic policy and legisla-tion formulation, while the professional agen-cy can focus on implementation of policies, law and regulations, reducing potential inter-ference and corruption.
A well-managed professional agency pro-vides the private sector with confidence to make long-term investment decisions. An agency is less affected by political change than a ministry, and by establishing the NMA Sierra Leone guarantees predictability and consist-ency within the mining sector, which is crucial to secure large long-term investment.
The new NMA building
AML ramps up to 20 million tonnes per annumThe resolve is still alive to meet the commitment made at its
high-level leadership conference in Freetown. African Minerals
(SL) Ltd is out to restrategise on production and supply of iron
ore in 2013 and beyond. In February 2013, the business set
itself a realistic target in line with its:
> mission – ‘to reward our shareholders through the
responsible exploration, development and mining of mineral
resources’;
> vision – ‘to be the developer and operator of choice for all
our stakeholders’, and
> values – ‘respect; integrity; transparency; caring and
teamwork’, including making government and its citizens
also benefit from the resources of their country.
AML’s focus AML aims to transform from a developer into a mature
organisation that can be successful in the medium term.
> ensure short-term health: financial stability, complete capital
projects, achieve 20Mt/y;
> build the organisation’s human resources, HSES
performance reporting and enhance external relationships
with the communities, the government of Sierra Leone,
cornerstone and institutional investors.
“Recent months have demonstrated momentum in the
production volume ramp-up across the project. At the mine, rail
and port, overall capacity has increased as remaining projects
are delivered and debottlenecking taking place,” a working
document of the company said.
AML also resolved that it was moving towards a “pay for
performance” remuneration strategy to align senior leadership
with shareholders’ interests. The system has been touted as
one element of the company’s talent management strategy
which would include performance appraisal, goal setting,
career planning, training and development.
Outlook AML is on track to demonstrate sustainable production capacity
of 20Mt/y in the second quarter of 2013; six ocean-going vessels
shipped in February, equivalent to a rate of 12Mt/y; expects to
be cash-flow positive on a sustainable basis during Q2 of the
year; plant conversion and product mix strategy are in place to
overcome impact of the rainy season on shipping in 2013.
The company is also looking forward to optimising the Pepel
35 brownfield development plan to expand to 35Mt/y with lower
risk and higher confidence of execution saving around $1billion
in capital expenditure compared to previous estimates.
Keith Calder, CEO, commented: “2012 has been an important
year for AML, a year characterised by the strengthening of the
team, a major investment from SISG, the continued ramp-up of
production and a significant de-risking of the next phase of the
project, now with the brownfield development at Pepel, which
will result in a material reduction in capital expenditure.
“The progress we have made in 2012 and early 2013, in
installing physical production capacity and strengthening our
leadership capability, position us well to achieve our sustainable
production target of 20Mt/y during Q2, 2013.”
African Minerals, UK African Minerals, SL5 Stratton Street 154 Wilkinson RoadLondon W1J 8LA FreetownUnited Kingdom Sierra Leone
www.african-minerals.com
1p_African Minerals_ad_alt.indd 2 29/05/2013 11:55
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