The National Advocacy Coalition on Extractives (NACE) in collaboration with its partners and Christian Aid yesterday officially launched a mining report titled Sierra Leone at cross roads with the theme “Seizing the chance to benefit from mining” at the Bintumani Hotel Aberdeen village in Freetown.
Sierra Leone it was revealed has an opportunity to redraft the country’s mineral legislation and review individual contracts signed with mining companies because the National Advocacy Coalition on Extractives analysis has revealed that some individual mining and tax agreements signed with mining companies have provided extraordinary concessions.
According to the report a 2003 agreement with Sierra Rutile reduced the company’s royalty rate to a minuscule 0.5 percent until 2014 and scrapped entirely the payment of corporate income tax on profits until 2014.
According to the reports NACE calculation is that the country will lose (US$92m) ninety two million dollars from the royalty concession alone and NACE understanding is that the company may be paying less than ($1m) one million dollars in annual remittance to the Government.
The report also suggests that Sierra Leone could export US$1.2 billion a year in mineral export by 2020 – a sevenfold rise over current levels, and that with good Government spending nearly a million people could be lifted out of poverty.
The report also reveals that no mining company in Sierra Leone is currently declaring a profit, but there are profit projections from the two major companies Sierra Rutile and Koidu Holdings, which are the country’s largest mining companies.
The report considers how the people of Sierra Leone could benefit more from the country’s mineral resources especially diamonds and rutile because minerals account for around 90 percent of exports but ordinary Sierra Leoneans are failing to benefit significantly.
The report indicates that tax laws in Sierra Leone have given too much away to mining companies while government policies to monitor and regulate the mining sector are poor or nonexistent which has resulted to the current expansion in mining have not yet translated in to benefits to the people.
The reports also highlighted extreme lack of transparency with lack of information at all levels and the severe lack of capacity in all government departments associated with mining and there is a huge gap in the mining regulations which is creating uncertainty among companies and communities, and which is a recipe for corrupt practice.
The report also made some recommendations to the Government with special focus on the many laws and policies which needs to change if ordinary Sierra Leoneans are to benefit significantly from mining and that the government must commit to meeting the recommendations on transparency outlined in the draft minerals Act.
The launching ceremony was chaired by the Anti Corruption Commissioner Abdul Tejan Cole while statements were made by Hon, Sylvester Augustine Torto, Sam Koroma of Government Gold Diamond Office, Joseph T Kanu deputy Financial Secretary, Country Director Christian Aid Lynda Kerley and Abu Brima of the Network Movement for Justice and Development.
Mark Curtis and Joe Rahall delivered a presentation on NACE findings and recommendations while the Minister of Mines and Mineral Resources Alhaji Alpha Kanu delivered the keynote address and officially launched the report.
By Saidu Bah