By Mohamed Jaward Nyallay
The Government of Sierra Leone has taken over the assets of Tonkolili Iron Ore Limited (TIO), a subsidiary of Chinese miner, Shandong Iron and Steel. The takeover comes after the government invoked Section 50 of the 2009 Mines and Minerals Act after the company failed to meet its tenancy agreement.
The takeover ends a five year stint of the Chinese miner since they took over the mines from the defunct African Minerals Limited (AML). Shandong took over from AML in 2015 after acquiring their 75% share for US$117million.
However, mining at the site came to a halt in 2017, following financial struggles that Shandong faced. But they continued to export iron ore out of the country until 2018.
At the height of its productivity in 2014, AML exported up to 18 million dry metric tons of iron ore from the Tonkolili mines, according to the Minister of Mines and Minerals Resources, Timothy Kabbah. The export rate was among the highest in the sub region at the time.
In a short ceremony on Tuesday at the mining site in Tonkolili, representatives of Tonkolili Iron Ore Ltd thanked the government for their patience and understanding throughout what they described as a “difficult” period.
The General Manager of TIO Ltd., Bo Wang, said: “As it is well known, Tonkolili Mines has suffered some difficulties and setbacks since it started up. Since the company took over in 2015 we have been committed to management, cost cutting, optimizing as well as increasing efficiency resulting into considerable cut in the cost of operation.”
“However, the mining operations had to stop in 2017 as a consequence of various matters left over by the former owners, as well as the market at the time. After that the company has been maintaining the site relying on loan and has no capability to continue the business,” Mr Wang added.
The Minister of Mines said this is the first time the state is taking charge of property of a mining company, describing the event as “historic”.
“Today we are here to receive the site and assets on behalf of the people of Sierra Leone. This is historic because it is the first time in the history of this country that the people are getting an asset of this value,” Kabba said.
“We wish you the very best and we thank Shandong for how they have gone about this negotiation,” he added.
The assets that were handed over included tractors and other heavy duty machineries. But perhaps the most valuable assets that were handed over are the railway and port facility, which Shandong was using to export its ore.
Kabba said the companies operating around the area will be able to use the facility provided if they pay for it.
“We are going to generate some revenue from the ports and railway,” he said.
Today the site will be handed to another mining company who are set to start operations in the coming months, officials from the Ministry of Mines and Minerals Resources were all leap-sealed on naming the company, despite talks that it will be given to Kingho Mining Ltd.
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