The Minister of Mines and Mineral Resources has told journalists in Freetown that the reason why Chinese Iron Ore mining company, Kingho Investment Company Limited (KICL), made their first shipment of iron ore out of the country without parliamentary approval of their agreement with government was because they had signed what he described as a “One-off advance pricing” agreement with Kingho for the sale of the iron ore.
According to the Minister, Kingho Mining Company Limited was granted a large-scale mining license by government on 8th January 2020. On 21st December 2020, Kingho Investment Company Limited, the parent company of Kingho Mining Company Limited and Kingho Railway and Port Company Limited, submitted an Expression of Interest (EOI) to export the iron ore stockpile at Pepel Port on behalf of the government of Sierra Leone on commercial basis.
Minister Kabba said the EOI submitted by KICL only covers the iron ore stockpile at the Pepel Port site and that it drew the attention of government to the fact that the iron ore stockpile is being stored on a pad that will be used by Kingho Mining Company Limited for stockpiling its ore transported from the Tonkolili mine site expected to be in production in February 2021.
Kabba said the Chinese company noted that, considering the volume of the iron ore stockpile and the space it occupies, it agreed that exporting the old ore stockpile now will create sufficient space for its incoming iron ore from the Tonkolili mine site.
The Minister disclosed that the conclusion of “The 8th January 2021 lease agreement between government and the company with the railway and port to operate the Tonkolili and Pepel Railway and Pepel Port facilities, placed them in a better position to have the right of first refusal to export on a one-off commercial basis of the iron ore stockpile at Pepel Port on behalf of the state.”
The Minister said having thoroughly assessed the situation both locally taking into consideration the nature of the iron ore product, current insurance, any legal costs, quality adjustments and marketing fees among many, government and Kingho have negotiated a ‘One-Off Advance Pricing Agreement’ prior to the export of the ore stockpile at Pepel Port, which according to him, is subject to cabinet concurrence.
The Minister of Mines and Mineral Resources revealed that, “As part of the one-off APA negotiations process, the National Minerals Agency, MMMR and MOF/NRA ensured that Kingho Investment Company Limited committed to providing certain critical information in relation to the sale of the iron ore stockpile at the Pepel Port.”
He went on that “Sales contract with third-party, copy of certified laboratory report for shipment samples taken, provisional invoice, freight invoice from carrier, draft survey report, customs certificate at the port of delivery, etc. and all supporting documents that can explain all differences between the plats iron ore price and the quoted ‘base price’ will be provided.”
He ended, “The ownership of the iron ore stockpile at the Pepel Port rests with the state and under the authority of the Minister of Mines and Mineral Resources. Hence, the Minister of Mines and Mineral resources urgently put modalities in place through the cabinet to legally, morally and ethically authorise Kingho Investment Company Limited to export on a one-off commercial basis as agreed in the One-Off Advance Pricing Agreement, the iron ore stockpile at Pepel Port on behalf of the state.”