The Sierra Leone Web



Before the outbreak of the civil war, Sierra Rutile Limited (SRL) was the major source of Government revenue providing around US$9.4 million annually, 50 per cent of foreign exchange earnings and a major private sector employer with a workforce of 1,800 people. Government is committed to supporting this project as it is hoped that this will stimulate the economy and signal the positive environment for foreign investment. The Sierra Rutile Limited mine which covers an area of 580 sq. km in the South West of Sierra Leone in the Moyamba and Bonthe Districts has deposits with an insitu value in excess of US$3 billion. This mine was responsible for 25 per cent of the world's production of rutile at the time it ceased operations in 1995.

The benefits flowing from the company to Sierra Leone were lost to the economy as the Company had to cease operations because the rebels had targeted the company's infrastructure for destruction. Since that period the security of the company's assets was to a great extent safeguarded through the steadfast commitment of (Rtd.) Major Abdul Karim Seray-Wurie and his corporate team of caretakers, some members of our National Security Forces particularly the Civil Defence Forces and the Chiefdom Authorities. On behalf of my Government I say thanks to all those who contributed to the maintenance of the security of the Company during those trying times.

My Government has been following closely the efforts made by the company towards resuscitating its operations. Since the company was closed down well over US$100 million has been invested in the care, maintenance and resuscitation of the company by the shareholders. We have facilitated some of these efforts because the Government appreciates the private sector's potential capability in the creation of wealth, generation of employment opportunities, and as a stable and growing source of revenue through corporate taxes.

In North America, Japan and Europe, the private sector provides the bulk of the employment. Government revenues are derived from taxation to finance infrastructural and social programmes. This project has the support of not only the Government of Sierra Leone but also the European Union (EU) and an American Government Agency, OPIC. The EU made a grant of Euro 25 million (US$30 million) to the Government of Sierra Leone which was passed on to the company to represent the Government's contribution to the capital of the company. This amount plus interest of 8 per cent per annum would be repaid by Sierra Rutile to the Government of Sierra Leone. The OPIC loan of US$25 million represents a commercial loan to the company. The other shareholders would contribute a further US$14 million to the project. This shows that the Government of Sierra Leone would be making the largest contribution to the start-up capital of the company.

I would therefore like to take this opportunity to express the grateful thanks of the Government and people of Sierra Leone to both the EU and OPIC. As a result of this new arrangement, Government will be entitled to earn up to 30 per cent of the profits of the company. This is in addition to corporate and PAYE taxes that the company will be paying to Government as well as royalties to the local community. Indeed it is the Government's policy that this time around, we as a nation expect to obtain a lot more benefit from the operations of SRL than at the time it was shut down.

Government by this arrangement will have additional representation on the SRL board. In addition we anticipate that the company will undertake some processing of the ore locally before exportation. Thus adding value, developing skills of our labour force and also generating additional employment opportunities.

A major part of the mine refurbishment programme is a comprehensive training programme aimed at ensuring that the mine employees achieve high levels of productivity whilst working in a safe and healthy environment. This training will ensure that pertinent skills are transferred to Sierra Leoneans which will result in an efficient labour market. It is envisaged that local employees will be trained to take over a range of management positions in the first few years of operations. These measures will help to support the attractiveness of Sierra Leone as an investment destination.

The environment and impact of mining activities have been a major source of concern of government which seeks to ensure that in deriving benefits from mining, the environment is not damaged irretrievably. In this regard, an independent Environmental and Social Impact (ESIA) study was conducted by the company in 2001 in accordance with World Bank and IPC guidelines. Part of the company's ability to attract investment relies upon the environmental credentials of its operations and is an essential element of SRL's licence to operate. It is hoped that the company will fundamentally redress the balance and put environmental and social performance at par with economic performance, at the centre of corporate responsibility.

Now that peace and political stability have returned to the country, Government has formulated policies to attract investment in the mining sector, especially for industrial minerals, such as rutile, bauxite and iron ore. This has been recognised internationally by Sierra Leone winning the prestigious British Mining Journal Country Award for 2004.

I am pleased to disclose also that within the next few months the former SIEROMCO Bauxite Mines will reopen and will create more opportunities for jobs for Sierra Leoneans. The prospective investors have already commenced exploration activities in the Port Loko bauxite deposits.

Furthermore, the Government has recently received proposals from a British company, Argyll Resources, to develop a 1.5 m. tonnes per annum alumina plant in Sierra Leone to carry out initial processing and add value to the bauxite deposits before exportation.

We have long recognised the importance of the nation's mineral resources and their significance to the future development of the health and wealth of the economy and the people of Sierra Leone. Today's ceremony marks not only the re-opening of the mine but sends a clear signal to the international community that Sierra Leone is more than open for business.

Whilst underlining the continuing commitment of this Government to support this venture, I also urge the people of Sierra Leone to seize this opportunity which this project presents in terms of our ability to meet the environmental safety and operating standards of modern mining. In doing so we will all benefit from the increasing attractiveness of Sierra Leone as a place to do business.

For my part, I can assure you that benefits derived from this and other developmental and mining projects would be used in a judicious and transparent manner to better the lives of all Sierra Leoneans.

In summary, the advantages of this investment are enormous: job opportunities and skills training for our people; sound environmental management of our natural resources as well as considerable revenue generation activities such as corporate tax, royalties, interest from the EU grant and dividends. These do not include other benefits that may flow from the supply of other goods and services by local contractors to the company. It is therefore significant that we receive our partners in this project with the utmost courtesy, hard work, honesty and sincerity so that their stay in Sierra Leone is not only profitable but enjoyable.

With these few remarks I now have the pleasure to declare once more the Sierra Rutile Limited mines open.

I thank you.