By Allieu Sahid Tunkara
One of the country’s mining companies, China Kingho is pleading with government over its failure to pay a royalty of $4.9M, an equivalent of Le4Bn.
The Iron Ore miner, for several years, has reneged to pay the said sum owing to what it referred to as challenges facing the company.
China Kingho was supposed to have paid the said sum in three instalments, but a document seen by Nightwatch indicates that it was difficult for money to be transferred from China to Sierra Leone.
“…Sometime last year, we negotiated a payment plan with the National Revenue Authority which we started to honour. It became extremely difficult to transfer funds from China owing to some stringent economic policies enforced by the government of China,” a portion of the document reads.
As the $4.9M remains outstanding since 2018, the document contains a payment plan of $1.6M to be paid by instalment from June to December of the same year.
To date, the royalty remains outstanding and renders the Iron Ore miner liable to penalties for default of payment.
The liability factor compelled the Iron Ore miner to crave the indulgence of the National Minerals Agency, the regulator for all mineral miners in Sierra Leone.
Similar challenges were also expressed by the company making it difficult to carry out mining operations as planned.
The fall of the global Iron Ore price, years back, has been advanced as another reason the company failed to honour its financial obligations.
A letter dated 23rd May, 2018 indicates that the company was seriously hit by the global economic challenges.
The Iron Ore miner also catalogued several constraints which it said badly affected their operations since it was granted mining licence in 2014.
The China Kingho mining project, the document says, requires huge capital investment for the construction of railways and port facilities.
Negotiations between China Kingho and the defunct Iron Ore miner, African Minerals Limited to use the latter’s port facilities failed.
The indebted company hopes for an economically viable business if Price of Iron Ore rises to at least US$130 per ton.
China Kingho also has plans to relinquish one of its licences of the Southern Mining Company Ltd. Situated at Gallinas Perri and Kpaka chiefdoms in Pujehun district.
In spite of the daunting challenges confronting the company, it however remains committed to proceeding with their mine development plans and operations with an eye fixed to an improvement in the price of Iron Ore.
China Kingho Management says, it maintains excellent relationship with the community of its intended operations through constant collaboration.
However, since the company obtained mining right in 2014, the document states, no major mining activity has taken place.
Government’s hope to get the $4.9M from a company struggling to gain a foothold in the mining industry is far-fetched.