Freetown, SIERRA LEONE – Sierra Leone’s Minister of Mines and Mineral Resources, Julius Mattai, expressed disappointment over the country’s mining sector, stating that it should be the nation’s “bread basket,” yet the benefits derived from it are not as substantial as expected.
Speaking at the Radisson Blu Hotel in Aberdeen, Freetown, on December 20, 2023, Minister Mattai made these remarks during the signing ceremony of a $55 million Mezzanine Finance Agreement between FG-Gold Limited, owner of the Baomahun Gold Mine Project, and the Africa Finance Corporation (AFC).
The event also marked the signing of an Engineering, Procurement, and Construction Management (EPCM) Agreement with Lycopodium Minerals Canada Limited for the design and construction of a 5 million tons per annum (Mtpa) processing plant and associated facilities.
The Minister commended FG Gold for investing in Sierra Leone, acknowledging the inherent risks in mining ventures. He stressed the importance of creating a conducive environment for investors, cautioning that mining licenses could be revoked if proper practices are not followed.
Highlighting the historical challenges faced by the gold mining industry in Sierra Leone since the 1920s, Minister Mattai expressed concern that despite being the potential “bread basket,” the sector’s contribution remains limited. In 2022, the total revenue from gold production amounted to $5.6 million (127 tons of gold), whereas a ton of gold is valued at approximately $60 million.
Comparatively, the Minister revealed that Sierra Leone’s diamond exports in the previous year totalled $148 million. He lauded FG Gold for its substantial investment, exceeding $100 million, emphasizing that such levels of investment had not been witnessed in the mining sector before.
Addressing the need for job creation, Minister Mattai noted that there are about 14,000 direct employments in the mining sector, emphasizing the importance of competitiveness among local labour forces. He urged a shift in mindset to ensure that employment is based on merit rather than nationality.
FG Gold’s Baomahun Gold Project, set to become Sierra Leone’s first large-scale gold mine, is currently in the construction phase. The $55 million Mezzanine Finance Agreement with AFC will accelerate construction activities and secure key equipment packages, maintaining the project’s timeline for first gold production by December 2025.
The EPCM Agreement with Lycopodium Minerals Canada Limited signifies a continued partnership for the Baomahun Gold Project, aiming to establish it as a premier gold mine. Lycopodium Limited, a globally recognized engineering company, has been actively involved in the project since 2021.
President of Lycopodium Minerals, Canada LTD, Sohail Samdani, presented Lycopodium’s global presence and expertise, expressing excitement about contributing to this landmark project in Sierra Leone. SKS/21/12/2023