Gerald Group wins back its iron ore mining rights in Sierra Leone
11 May 2021
After two years of costly court action between the government of Sierra Leone and the owners of SL Mining, Gerald Group, both sides yesterday met in Freetown where they signed an agreement ending the dispute which would allow SL Mining to resume iron ore mining operations in Lunsar, northern Sierra Leone next month.
The dispute started soon after the ruling SLPP party won elections in 2018 and took action to suspend, and in most cases cancel a wave of mining agreements signed by the previous government, including SL Mining operations, leading to the seizure of the company’s assets by the SLPP government.
Since then, a multi-million-dollar lawsuit filed by the Gerald Group at the International Arbitration Tribunal has proved costly for the government, who has also seen its mining revenue which accounts for over 40% of government revenue fell by over 30% in the last three years.
A report coming out of the government’s Strategic Communications Unit yesterday said: “The Government of Sierra Leone and SL Mining have in a Memorandum of Understanding agreed an out-of-court settlement aimed at resolving the issues between them. This disclosure was made today, 10th May 2021, at a meeting held at Tokeh Resort between the two parties.
“The out-of-court settlement has been done in the best interest of the company and the country as the MoU seeks to ensure a win-win situation. The stalemate was as a result of Government’s cancellation of the Company’s license for alleged breach of its mining lease agreement.
“The CEO of SL Mining Craig Dean, Minister of Information and Communications Mohamed Rahman Swaray, Attorney General and Minister of Justice Anthony Brewah, and Mines Minister Timothy Kabba, all expressed delight at the peaceful resolution.
“This is good news for Sierra Leoneans with the company expected to resume operations soon, thereby creating thousands of jobs and also contributing to the growth of the economy through the payment of taxes.”
So what are the terms of the agreement?
According to a statement received by the Sierra Leone Telegraph from the company last night: “All legal cases and /or allegations between the parties will be indefinitely withdrawn; a new company (“NewCo”) will be formed wherein Gerald Group will own 90 percent interest and the Government will own a 10 percent non-dilutable interest; NewCo will take over all assets and rights of SL Mining, which include Marampa North, Marampa South, and all property plant and equipment; Gerald has committed to increase materially the production of Marampa; NewCo to begin operations by 1st of June 2021; Gerald will have the immediate right to ship the current stockpile, which is ~707k tons of iron ore; Gerald will pay a fixed sum of USD 20 million in two instalments of USD 10 million prior to 31 December 2021; Gerald / “NewCo” will negotiate during the course of May 2021 a new Mining Lease Agreement that will be a win-win for the Government and Gerald.”
The company’s statement also says that: “Gerald Group (“Gerald”), the world’s largest independent, employee-owned metals trading house, is delighted to announce that the long-standing dispute between the Government of Sierra Leone (the “Government”) and SL Mining Limited (“SL Mining”) / Gerald Group (“Gerald / the Group”) has been amicably resolved in the best interests of the people of Sierra Leone, the Government and SL Mining/ Gerald Group. A binding agreement was signed by both parties on Friday, May 7, 2021. In the spirit of the resolution, SL Mining / Gerald Group and the Government will withdraw their respective legal claims / allegations under both ICC and ICSID arbitrations, and both Gerald and the Government will provide full support to ensure a rapid commencement of mining operations.”
Mr. Craig Dean, Gerald Group’s Chairman and Chief Executive Officer, stated, “I am delighted that we have been able to resolve our differences and have a fresh start and new beginning with the Government of Sierra Leone. I would like to thank His Excellency, President Bio, for personally working with me and the team to resolve this long-standing situation in the best interests of the people of Sierra Leone, the Government and Gerald Group / SL Mining. We look forward to a positive long-term working relationship”.
Last night, the government’s ministry of information and communication published a press notice inviting the media to a press conference taking place in Freetown at 10am GMT (9am local time) today to discuss the government’s agreement with the Gerald Group. The conference will be televised live on national TV.
You can read the full statement by Gerald Group here
Source: Sierra Leone Telegraph