Hit hard by several human rights cases, Sierra Leone Government is being stretched to a breaking point as it risks several lawsuits for breaches of agreements. Arise Integrated Industrial Platform (Arise IIP) and Marampa Mines Limited (MML) formerly SL Mining will sue Sierra Leone Government for failing to respect portions of agreements gone into for use of the Pepel port and rail which has been handed over to a Chinese company called Leon Rock Company aka Kingho.
Arise IIP is an African-based company that provide eco-systems and transforms agricultural and mineral produce into finished goods with Benin, a West African country standing as a bright example.
According to an agreement signed by government and Arise IIP, the company was given the right to take possession of 1, 800 hectares of land at Koya community in PortLoko district as well as the 192-mile Ferengbeya-Pepel rail and port in Tonkolili and PortLoko districts respectively. President Julius Maada Bio himself launched the company in Koya in the presence of a number of paramount chiefs in PortLok district and other stake holders.
Convinced by government’s rhetoric on investment, Arise IIP wasted no time in answering the call as work is already in progress with USD410m spent in the first phase with more money set to come in subsequent phases.
Over 1, 000 workers have taken up jobs and the company expect to hit a record number of 34, 000 if every things goes as planned according to Junior Navo, proprietor of African Young Voices Media Empire.
Last week, a media tour was conducted on the site led by Paramount Chief of Koya Chiefdom, Bai Kompa Bomboli the 3rd who praised the company for providing jobs in less eight weeks of their existence.
Section chiefs, village heads, local stakeholders and youth remain highly impressed by the realities on the ground, and wanted the company to stay in their community as they look forward to a brighter future.
But, Arise IIP was taken aback when government handed over the rail and port to Leone Rock few days ago. The announcement was made by the Mines Minister, Julius Mattai in a press conference held last week at Raddison Blu Hotel in Freetown.
At the press briefing, the minister also confirmed that there had been an agreement between Arise IIP and the Sierra Leone Government.
“The agreement between Arise IIP and the Government of Sierra Leone was signed in January, 2023 to control and manage the rail and port,” the Minister informed Journalists who he also subjected to verbal attacks. He referred the journalists’ recent visit to Benin to assess the company’s achievements as a mere pilgrimage.
Despite the existence of the agreement, the Minister went on, there were several conditions enshrined in the same agreement which had to be satisfied at a particular time.
In the event of non-compliance, the minister said, government retained the right to terminate the agreement by mutual consent. This press is however not yet updated with the conditions breached by Arise IIP which has warranted the company’s termination.
This press is yet to lay hands on the agreement to confirm or justify government’s action, one that widely seen illegal.
The minister defended government’s action on the grounds that Arise IIP did not communicate to them after six months, and it is not clear whether the failure to communicate confers any legal right on government to partially terminate the agreement.
Successful operations of the Koya Economic Zone is highly dependent on the rail and port for successful business.
It is therefore a worrying situation for Arise IIP as the latest government action confers monopoly on Leone Rock, a company that has been around for some time without much benefit to the country.
As Leone Rock takes complete control of the rail and port, the expansion of Arise IIP would be restricted as they could be limited in the quantity of products that they would export to other countries.
According to a senior opposition politician who now enjoy close ties with SLPP (Sierra Leone People’s Party), Arise IIP will seek redress in court to reverse government’s action the same way, the Iron Ore miner, MML did three years ago when their agreement was arbitrarily terminated by the current government.
The termination, in 2020, temporally put on hold MML’s plans to exploit Marampa Blu (the popular name for Lunsar Iron Ore) for 25 years.
In the current situation, MML has raised serious concerns over government’s deal with Leone Rock citing key portions of its agreement with government. A letter dated 16th October, 2023 has been addressed to the Mines Minister, few days ago, after it learned that the port and rail had been handed over to Leone Rock.
In the correspondence, MML made it clear that they have a reasonable expectation of use and material interest in the port and rail.
“Our ratified Mining Lease Agreement (MLA) grants clear rights to MML a priority right to use the rail and port to export its ore as ‘most favoured customer’ terms on a non-discriminatory basis,” a portion of the MML letter reads.
It is also clear in the agreement that Government of Sierra Leone will facilitate and ensure that MML has access and use of the Pepel rail and port and that any agreement with any entity must put MML’s interest first.
Clause 5.2 of the Agreement between government and MML states that “to transport all Iron Ore and other minerals using public roads and highways, and Marampa Mines constructed roads to a jetty on the PortLoko river, rail and port infrastructure from Tonkolili and Marampa to the Pepel Port and any other infrastructure and port solution it constructs later in its operation for the expansion of production.”
This clause is a confirmation of the right MML enjoys in the unfetterd access to the port and rail facilities over which Kingho now holds with a seeming monopoly.
Weight is also added by section 5.3 of the agreement stating that “Marampa Mines will be ensured and afforded the access and use of all existing rail and port infrastructure including the existing infrastructure from Tonkolili to the port of Pepel…and rates charged to Marampa Mines for use of the said infrastructure shall be equal to or more favourable than any other party using the rail and port infrastructure.”
The agreement also states, in no uncertain terms, that Marampa Mines has a priority of right to any and all unused capacity at all times, and where there is a conflict between this provision and a provision under the existing Railway and Port Lease Agreement between government and Kingho, the latter stands.
In the protection of their right, MML recently held several discussions with Kingho about the use of the rail and port to export their Iron Ore concentrate before the end of the year, but they were left with big doubt about whether Kingho would grant them such access.
Instead of giving them the Green light, Kingho is expressing interest to buy the Iron Ore from MML, a move that puts the latter in an uncertain future.
“The discussion, though friendly, left us with the clear impression that we would not be afforded access and use of the rail.
In fact, rather cheekily, Kingho asked us to sell them our high-grade Iron Ore concentrate to make things simple,” MML officials said.
The sale request was rejected outright with MML making it clear that under no circumstance would they sell their ore to them.
Based on the foregoing analysis, fear that they would not use the port and rail facilities if the Kingho lease remains intact still looms.
It is also in clear violation of the agreement thus directly and negatively impacting MML’s long-term expansion plans.
MML’s letter is a danger signal to government and must not be treated with a pinch of salt. MML is almost complete with its 3.75 expansion to be commissioned in January, next year to so that the company would export approximately 4 million tonnes.
As a result, MML repeats its call for unconditional access to the Pepel port and rail to export their Iron ore to ensure profitability, susatainability and favourable competition in the business world.
The company hopes that revenue would be increased as well as royalties only when the company expand on its business operations. Whether government would listen to MML’s appeals is a wait-and-see affair as the company never went into agreement with them. The Iron Ore miner signed an agreement with then government of Ernest Bai Koroma, a man accused of leading a government of racketeers between 2007 and 2018.
Consumed in a spate of revenge for Only God knows why, Bio’s government punctured the agreement saying it “contained errors.”
Such action portrayed Bio as one that is a bit nitpicky with an agreement that was prepared by eminent lawyers and went through various stages of approval including parliamentary endorsement. Appeals to government to allow MML carry out its mining operations fell on deaf ears as government pressed ahead with its actions.
Poised to see that MML officials forcefully leave the mining site in Lunsar town, the company’s officials were brutally attacked by police officers and detained most of them. Government knew that what it had been doing was out of the law as sources said the company’s refusal to honour USD1m request made by government was the cause of the bad blood between the two entities.
Then Minister, Foday Yokie was dismissed when the plan became true. As the spate of brutality persists, the company sued government in an international tribunal to determine the extent to which their right have been abused by state actors.
Government eventually lost the suit and ordered to allow the Iron ore miner to continue its mining. A compensation scheme was also mandatory so that the company could recover from financial losses it incurred in the course of the adjudication.
As broken as it was, Bio’s government compensated MML in kind and not in cash: the company mined the ore for a year without payment of royalties and corporate assistance to the communities.
The free mining came to an end about two years ago, but with a big cost to a country that is in dire need of foreign currency to stabilise the exchange rate.
Instead of learning a big lesson from its own mistake, government appears to have done worse than what it did to MML years gone by.
This time, government will battle not battle with one case, but with several lawsuits, a bad start for a government that has been struggling for local and international recognition.