Siera Leone Telegraph: 26 May 2022:
Kingho Mining Company, a subsidiary of Leone Rock Metals has paid 5.3 billion Leones into the accounts of the Sierra Leone government’s Community Development Agreement (CDA) Fund. Commenting on Kingho Mining Company’s contribution, President Bio said that this is a bold step in supporting the development of mining communities.
CDAs are required by law in Sierra Leone, and involve the allocation of revenue from extractive activities to local communities. They are negotiated between extractive companies and host communities at the outset to reduce the risk of conflict later.
Speaking at the Kingho Mining site in Tonkolili, President Bio said: “I am very pleased to be here this morning to formally launch this Community Development Agreement payment to local community stakeholders. It aligns with my vision of formalising and regularising how mining communities can substantially benefit from mining activities in their areas.
“But as the CEO acknowledged earlier, this has come about mainly because my Government has provided a conducive and enabling investment climate in the mining sector. We have guaranteed not only that mining investments are secure and can be fully supported within a transparent regulatory regime, but that patient investors can also make a profit and repatriate or reinvest their profits. We are therefore most pleased to work with Leone Rock Metals, who, in spite of the financial shocks of the global COVID-19 pandemic, have made this major investment.
“But in the investment plan of Leone Rock Metals, we also see the future of mining operations in Sierra Leone. The Tonkolili deposit is relatively lower grade and, therefore, has not commanded a consistent value on global markets. Ore optimisation and value-addition are therefore critical to my Government’s vision of the future of mining in this country. These will not only create more revenue for both the Government and investors but will also create high-value jobs in the sector. A proposed steel plant in Sierra Leone will be definitely good for industrialisation and manufacturing and also good for higher export revenues. Rest assured, therefore, that I will be present and I will commission the ore optimisation plant when it is fully installed in the near future.
“But we have gone one step further. Governments in the past have not fully considered and planned for the eventual transition of mining communities from being mining-dependent to self-reliant post-mining communities. When mines shut down, jobs disappear, economic activities cease, and communities go into a downward spiral of poverty.
“I believe we can do better for mining communities. I believe increasing community development agreement payments from 0.01% of annual revenue in the previous operation year to 1% during mining operations is in the best interests of mining communities. Mining communities should not hold begging bowls; they should be paid substantially more to invest in sustainable livelihood and community development projects that would sustain the economic viability and resilience of their communities. My Government has therefore proposed, for the first time in the history of this country, passing a law that increases CDA payments from a paltry 0.001% to 1% of revenues.
“This increased payment, to my mind, is a win-win for all sides. The CDA steering committee will help promote a positive relationship with the company and help prevent, mitigate, and resolve potential conflicts. The company’s operations are assured and its assets are protected. The company supports and promotes sustainable livelihood and socio-economic development within the mining area.
“I am informed that although mining in Tonkolili started in 2011, communities have never received any CDA payment throughout the years of mining. I cannot comprehend why the last Government never thought it fit for communities to benefit substantially from mining operations in their area.
“I am, therefore, pleased that the Honourable Member of Parliament has laid out the impact this mining company is already creating in Mabonthor, especially in support of the free quality education, the rehabilitation of health centres in Dankawalie and Kamedugu, and the support for agriculture and the general social life of the people.
“It is gratifying that the Honourable member of Parliament acknowledges that I am the first head of state who has facilitated CDA payment into a mining company in Tonkolili District without headache or strike action. It is also reassuring that the Honourable Member of Parliament has made a public commitment to support the new act laid in parliament by my Government that substantially increases CDA payments to mining communities. This acknowledgment shows that reforms and benefits resulting from those reforms are meant to benefit every Sierra Leonean. As long as Sierra Leoneans benefit substantially, I am pleased. But as a politician, I will be even more pleased when those communities demonstrate their confidence that I will fight even harder for their interests when they vote for me.
“The CEO earlier indicated that like my Talk and Do Government, they talk less and do even more. Today, they become the company to make a CDA payment to the Tonkolili Iron Ore Mining Communities. Over Le5 Billion Leones is accessible today because the money is already in their account. It, therefore, gives me great pleasure to formally receive and hand over this symbolic payment to the mining communities. You can rest assured that I will fight for your interests and I will continue to support Leone Rock Metals in its operations because their operations are good for the mining communities.
“So, as Sierra Leoneans, let us always position our interests well. Politics aside, let us work with like-minded leaders to advance our economic and other interests. Together, we can do more. Together, we can all build resilient mining communities and a better and more prosperous Sierra Leone.”
In a welcome statement, Paramount Chief of Dansogoia Chiefdom, PC Alimamy Bockarie Yalan Koroma III, thanked the government and the company for what he described as a big move, adding that the Kingho Mining Company’s CDA fund is the highest any company has paid since the discovery of iron ore in Tonkolili in 2010.
The traditional leader further noted that honour and dignity has been restored to his people and promised that they will continue to work and support the government and the Kingho Mining Company.
“Your Excellency, this is the first time such an amount is ever paid to the community. We want to thank you for providing such caring leadership. On behalf of the people of this chiefdom, I want to welcome you and your entourage and thank you very much for everything you continue to do for your people and the country,” he concluded.
Minister of Mines and Mineral Resources, Timothy Kabba, said the occasion was historic as it starts a new era in the lives of the people of Tonkolili, adding that Kingho is the only company that has started to pay the 1% CDA to communities, as opposed to the 0.015% in the Mines and Minerals Act.
He further noted that there has been a lot of reforms in the sector and assured that his ministry will continue to advocate for better conditions for mining communities in ways that the environment will also be protected for future generations.
“I am happy that the President himself is here today to unveil and hand over the Community Development Agreement Fund. Together, with the mining company, we will continue to support development in the communities. Thank you very much,” he noted.
Chief Executive Officer of the Kingho Mining Company, Gilbert Zhao, said it is a great honour to work with the people of Tonkolili who are now getting what they truly deserved, adding that the company will continue to look into the concerns of the people for greater working relations.
Mr Zhao further noted that because of the good working relationship between the management and its workers, there has never been any disruption of operations by industrial actions, adding that even in the midst of the devastating effects of Coronavirus, Kingho was still in operation.
“Kingho is not only here for today or tomorrow. We want to be here to make Sierra Leone better. We can do this together. Thank you very much,” he concluded.