Sierra Leone mining law to raise royalties, start export tax

Finance

Publishing Date: 13 Nov 2009 11:02am GMT
Author: Mining Journal

Sierra Leone’s Mining Minister Alhaji Alpha Kanu presented a bill to parliament yesterday that will raise the royalties paid by diamond miners and introduce a tax on mineral exports for the first time.

The royalty on diamonds will rise to 6.5% from 3%, Kanu said.

The new law will also alter exploration licenses, removing a company’s automatic right to mine whatever minerals they find.

Moreover, it will become compulsory for companies to develop the communities in which mining operations are carried out.

Koidu Holdings SA, Sierra Leone’s largest diamond mining company, had to pay US$1.1 million to settle a dispute with the local community this year, the newspaper Torchlight reported on August 14, citing the government. The company was ordered by the government to stop production in December 2007 after protests by the Tankoro community over alleged damage to their land, Torchlight said. The settlement paves the way for the company to resume production, it added.

Sierra Leone’s diamond production fell to 371,285ct last year from 448,925ct in 2007.

London Mining plc, a developer of iron ore deposits, said on November 5 that it held talks with Chinese commodity trading companies Sinosteel Corp and China Minmetals Corp over tying-up on the company’s Marampa project in Sierra Leone.

Bloomberg (November 13)