London Mining has found themselves in the spotlight over a month now since they were given corporate tax concession in order for them to start operations in the country.
It is correct for Civil Society to sound the alarm bells that the Mines and Mineral Acts has been pushed aside or neglected by given such concessions to the company.
We all have our views on this matter and we all can disagree to agree at the end of it all for the good of the country.
During the colonial era, the mining sector was used to develop the economies of Western nations with no attention to the sustainable development of the sector. This has not changed much in the post-colonial era. Although the benefits of mining to national economies are evident, local costs environmental and social impacts associated with mining, especially to local communities, are not being adequately compensated for.
Maybe this is what the Civil Society is concern about that the status quo will continue to better the West than our country that has the resources.
The mining sector reforms of the 1980s and 1990s under the auspices of the World Bank (WB) and International Monetary Fund (IMF) did not help the situation as they were aimed at attracting Foreign Direct Investments (FDIs).
The reforms also received criticism for the magnitude of special incentives offered to mining companies. The reforms have arguably reduced the share of rent, on which our government depend, to fund their social and economic development programmes. There is also the argument that mining has not been mainstreamed into development-oriented policies, as exhibited by weak linkages into the local, regional and national economies.
I want to differ from Civil Society that the concession given to London Mining is counter-productive to the development of the country. For a multinational company to operate in Sierra Leone especially London Mining who are starting from scratch to build the Marampa Mines, with no electricity, inadequate water supply, poor communication and infrastructure, I think they need such concession if they are to operate within the country.
This is one of the biggest investments this country is seeing in the last decade and for them to be spending such amount of money, it is right for them to ask for concession or given tax holiday.
Today China is prosperous because they allowed many of such multinationals to invest with five to 10 years tax holidays bending the rules to suite their aspirations of development. In my opinion, the government should have given at least five years tax holiday to London Mining but should make sure they corporate fully in their cooperate social responsibility.
The noise of the government bending the rules or operating outside the laws of the land is correct, but if they are doing it for the good of the country, I think we should not use it as a political tool, or avenue for some of us journalists as well as civil society groups to lash out at the government citing bribery and corruption when the bottom line is the development of the country.
The previous government did worse than this to Sierra Rutile when they went and took the loan for them that generations yet unborn will have to pay.
This company I am sure is not a flight by night, but credible and would want to work within the confines of the law as well as them making profit. They are not a charitable organization or an NGO, but London Mining is viable, credible and upright, that is why they have been working in other countries like Brazil, Greenland and China.
The laws in those countries make room for them to work within the laws and make profit as well as performing their corporate social responsibility.
I would like us to give London Mining the chance to start operations with the concession, but between three to five years, we revisit the agreement and make sure the mining laws are operated fully without fear or favor.
We cannot afford to drive investors out of the country; instead we should be looking at ways to bring more to invest if even the rules are bending a little bit. Currently, we have Addax and London Mining that are investing millions of dollars and everyday you read the newspapers or listening to the radio and watching TV, these company are being lashed out that they are not working in the interest of the country; whose interest are they working for?
Let us not follow the path of Zimbabwe, but let us soft pedal a bit and invite these multinationals to come and start operations in the country that will create thousands of jobs, taxes and quality infrastructure that would develop the country and improve the lives of all Sierra Leoneans.
China should be an example for us to follow for the good of the country as they gave lots of concession to develop their country. Today most of the multinationals in the country has been taken over by the Chinese.
They are now prosperous and the lives of their people are improving and they are now a force to reckon with. I would also want us to put more emphasis on the environmental damages that they would cause so we can put them under enormous pressure to make sure they revamp all the areas destroyed.
We have seen what happened in Mokanji, we should not allow such to repeat and we should push for them to re-afforest and revamp all mining areas destroyed.
We cannot concentrate all our effort blasting London Mining when there are other areas we should concentrate on for the good of the country.
Dependence on mining rent alone can hamper development by shifting focus from broader economic development issues and the expansion of other productive sectors. This often relates to the so called ‘Dutch Disease or Resource Curse’ in which high mineral revenues limit structural diversification; and economies fail to translate resource abundance into sustainable growth that uplifts peoples’ lives.
Ideally, mining should spur the development of spin-off sectors that supply mining companies with a range of inputs. These sectors, although initiated by mining, can be applied to other development areas of the country, thus precipitating the lateral migration of mineral-related technologies.
Generally, there has been a dramatic increase in the global metals intensity of use since adoption of the JPOI. This is unlikely to decrease despite the recent global economic crisis and the drop in commodity prices, due to the robust demand from growing Asian economies such as China and India.
So London Mining would definitely be around for decades to come and after the first five years we should urge the government to revisit all agreements and implement the mining policies that was passed few months ago.
The increased metal intensity of use has caused historically high metal prices which have permitted the mining of lower grade and difficult-to-access ores, resulting in higher energy use and more waste. The commodity boom and subsequent economic crisis have also resulted in a greater concentration of global mining capital (mergers and takeovers), while there has been a reduction of junior exploration and mining activity.
This has led to a decline in African exploration and an increase in the bargaining power of the large mining companies, and consequently their leverage on the negotiation of mineral contracts with African States with Sierra Leone no exception.
There has been improved stability in the political and economic environment in Sierra Leone and this has led to increased investment in our minerals sector, but very limited or no investment in the minerals linkage sectors due to lack of energy. There is also an emergent realization that mining could be a key instrument in establishing infrastructure (transport, energy and water) for the development of other sectors, such as agriculture and forestry.
Contracts between governments and mining companies are often performed in secrecy, with confidentiality clauses that prevent the public (the owners of mineral wealth) from knowing exactly what revenues are given to the State and what rights and privileges have been awarded to the mining companies. When the bill was taken to Parliament, the SLPP MPs were there and they never said a word, what I am talking about was the bill for the concession and not the one they walked out of Parliament. They sat there and never said a single word, when the civil society and the press picked it up, then the party leader started writing letters to president and shouting here and there.
London Mining and the government of Sierra Leone agreement was done in the open and LMC negotiated for the concession that they were given if they should start operations.
In essence, such negotiations in other countries are done because of inadequate democratic governance structures and institutional capacities in the area of revenue management. These drawbacks are compounded by a weak civil society that cannot engage government in revenue accounting matters, but in our own case we see the civil society vigorously engaging the government on the concession they gave to LMC and have been doing it in the past. There has also been an increase in the participation of civil society organizations, non-governmental organizations (NGOs), and communities’ initiatives.
I would like to urge all parties to chat the way forward for the good of the country, we should put aside our personal grudge and also stop talking about bribery and allow peace and tranquil to reign as the millions of dollars LMC is investing means they have to make profit if the first three or four years means they will make profit at our expense we have to accept it because I believe after five years we will have what it takes to collect all revenues due us and even be able to take over the mines.
I do hope we will put Sierra Leone first and copy the Chinese example for the furtherance of our beautiful Sierra Leone.
By Austin Thomas