Est 1835: Global mining investment and business insight

September 2018 Supplement www.mining-journal.com

Sierra Leone

Promise to prospectivity

001a_Sierra_Leone_2018.indd 1 10/09/2018 15:32 September 2018 CONTENTS

2 Welcome to Message 17 Commodities Vimetco Group managing editor Richard Roberts from the President: His Excellency rejuvenates assets: Head of Aspermont research Chris Cann President Brigadier (Rtd) Julius Maada E-mail: fi [email protected] Global aluminium producer looks at Editorial enquiries Tel: +44 (0)20 7216 6060 Bio local beneficiation options Fax: +44 (0)20 7216 6050 E-mail: [email protected] 3 Governance Sierra Leone’s new 18 Building better Advertising production Sharon Evans direction: Minister of Mines and communities: Koidu works to E-mail: [email protected] Mineral Resources, Dr Morie Manyeh, enhance Sierra Leone and regional Advertising welcomes investors sustainable development goals E-mail: fi [email protected] Sales executive 4 Regulations Rethinking resource 20 Diamonds Newfield advances Noli Aventajado Tel: +44 (0)20 7216 6086 governance: National Minerals Tongo development Executive business development manager Americas Yemi Onagoruwa Tel: +44 (0)77 881 96087 Agency Director General talks about plans: Project is regarded as Executive business development manager APAC new era for Sierra Leone minerals ‘generational asset’ with significant Wayne Heal Tel: +61 430 864 325 Sales director, global portfolio sector potential for further discoveries Andrew Porter Tel: +44 (0)20 7216 6085 Advertising manager 5 Exploration Country-wide survey 22 Iron Marampa rebuild Guy Davies Tel: +44 (0)207 216 6096 to start in October: Geophysics signals new era of co-operation: data to provide vital new insights into Subscriptions and circulation enquiries Vision for high-grade iron ore project Sales director: Roger Cooke Sierra Leone’s geological terranes has key technical, community Tel: +44 (0)20 7216 6064 E-mail: [email protected] 8 Exports Diamond, exports dimensions Senior global subscriptions manager: Emily Roberts Tel: +61 (0) 432 245 404 dip in 2017: Plenty of upside for two Email: [email protected] key Sierra Leone commodity exports For Mining Magazine subscriptions, please contact Tel: +44 (0)20 7216 6099 9 Legal Clamp down on illegal E-mail: [email protected] Published by Aspermont Media, WeWork Aldgate Tower, 2 mining: New focus on Leman Street, London, E1 8FA, UK. comprehensive regulation of mining, Printed by Stephens & George Magazines, Merthyr Tydfi l, UK. Registered as a newspaper at the Post Offi ce. environmental practices Subscription records are maintained at Aspermont Media 10 Exploration Promise to Ltd, 21 Southampton Row, London, WC1B 5HA Aspermont Media, publisher and owner of Mining Journal (‘the prospectivity: New initiatives set to publisher’) and each of its directors, offi cers, employees, advisers and agents and related entities do not make any warranty whatsoever as shine a stronger light on Sierra to the accuracy or reliability of any information, estimates, opinions, conclusions or recommendations contained in this publication and, to Leone’s mineral prospectivity the maximum extent permitted by law, the publisher disclaims all liability COMPANY PROFILE and responsibility for any direct or indirect loss or damage which may be 14 Governance Rules engender suff ered by any person or entity through relying on anything contained in, or omitted from, this publication whether as a result of negligence on the certainty around small-scale and 6 Sierra part of the publisher or not. Reliance should not be placed on the contents of this magazine in making a commercial or other decision and all persons artisanal mining: Government Storied past, future potential: are advised to seek independent professional advice in this regard. World’s largest natural rutile deposit policies aimed at ensuring adequate © Aspermont Media 2018 regulation of key sector supports long-term production plan Media ISSN 0026-5225

Key contacts Ministry of Mines and Mineral Resources National Minerals Agency Headquarters 5th Floor, Youyi Building New England Ville, , Sierra Leone Brookfields Tel: +232 79 250702 Freetown, Sierra Leone Email: [email protected] Web: www.nma.gov.sl/home Minister of Mines and Mineral Resources Director of Finance and Administration Dr. Morie Komba Manyeh Director General John Kapr Fornah Tel: +232 76 604811 Sahr Wonday Tel: +232 79 251242 Email: [email protected] Tel: + 232 76 601299 Email: [email protected] Email: [email protected] Deputy Minister of Mines and Mineral Director of Community Affairs, Resources Director of Mines Communication and Public Relations Evelyn Daphne Blackie Peter Kapr Bangura Ibrahim Satti Kamara Tel: +232 78 335454 Tel: + 232 79 252454 Tel: +232 79 252446 Email: [email protected] Email: [email protected] E mail: [email protected]

Permanent Secretary Director of Geological Survey Acting Director of Precious Minerals Trading Fatmata S. Mustapha Prince Cuffey Samuel Koroma Tel: +232 76 601492 Tel: +232 79 999980 Tel: +232 76 675986 Email: [email protected] Email: [email protected] Email: [email protected]

Supplement edited in London and Perth based on material supplied by JIC Media (www.jic-media.co.uk) Special thanks to Sahr Wonday, Victoria Nicol, Prince Cuffey; Dr Kelvin Anderson, Val Collier, Alie Toronka

Mining Journal • mining-journal.com • September 2018 1

01_Sierra_Leone_2018.indd 1 26/09/2018 13:59 SIERRA LEONE Message from the President

His Excellency President Brigadier (Rtd) Julius Maada Bio welcomes investors to the country On behalf of my Government and the people that is under siege and in a continent of Sierra Leone, I am pleased to inform the renowned for its unpredictability. An international mining community that Sierra environment where international investors Leone is ready for business. can be confident that they will have the The minerals sector remains critically support of Government to navigate the important to our country, contributing pitfalls and take advantage of opportunities between 20-25% of GDP. Our for creativity and innovation. country is richly endowed with “We have We are reviewing our mineral resources such as iron shifted our mining policies and laws to ore, gold, diamond, bauxite, establish a comprehensive rutile, ilmenite, zircon, thinking governance framework for the and columbite – towards mining sector to ensure a win- guarantee meaningful revenue for govern- tantalite (coltan). The presence win situation for the ment. We recently enacted the Extractive In- of these deposits represents looking at government, mining dustries Revenue Act, 2018 to consolidate the major opportunities for all policy companies and local fiscal requirements of our investors and ease potential investors and the communities. This framework the burden of keeping up with financial obli- country to derive optimal initiatives with will position our institutions, gations. benefits from the extracting, a dual lens” the laws, the regulations, the These reforms will address the many processing and exporting of fiscal regime and practices governance challenges of the past, these minerals. governing the operations of the mining and create a favourable, stable and To realise these opportunities, my sector to guarantee good returns on predictable investment climate. By clearly Government has committed itself to create investments and benefits to our people. defining procedures and streamlining the right environment to convince investors Our tax regime is internationally competi- processes, we shall reduce the risks to take that great leap to invest in a sector tive to ensure fair return on investment and associated with wide discretionary powers and corruption. We are essentially reducing the regulatory and political risk uncertainties long associated with African mining investments. We have shifted our thinking towards looking at all policy initiatives with a dual lens: seeing it from both the perspective of the Government and the perspective of the investor. We have also taken steps to improve energy access and develop our infrastructure. We are building and expanding our bridges and road networks; and continue to improve on electricity, water supply and communication systems. I take this opportunity to extend an open invitation to Investors to come to Sierra Leone and get the unique experience of doing business in a friendly and stress-free environment.

2 September 2018 • mining-journal.com • Mining Journal

02_Sierra_Leone_2018.indd 2 10/09/2018 15:36 SIERRA LEONE Sierra Leone’s new direction Minister of Mines and Mineral Resources, Dr Morie Manyeh, welcomes investors

I am pleased to use the medium to inform and quantity of our diamonds. We have a global audience that a wind of change more than 20,000sq.km of diamond fields in is blowing across Sierra Leone, and it is the eastern, southern and northern regions blowing the country and its people of the country. towards a New Direction: The Right The largest diamond found in Sierra Leone Direction. was a 970-carat diamond dubbed the ‘Star of Under this New Direction, we intend to Sierra Leone’, and this is, to date, the third- pursue policies and programmes aimed largest diamond ever found. at making Sierra Leone an even more Four of the 20-largest diamonds in the attractive destination for mining world are from Sierra Leone. Just under a investment. year ago, a local artisanal miner found a 709- We are committed to transforming the carat diamond in Eastern Sierra Leone, which minerals sector to guarantee good returns now stands as the 13th largest diamond in on investment, while at the same time the world. Sierra Leone exported more than ensuring that our people derive maximum 4 million carats of diamonds between 2010 benefits from our mineral wealth. and 2017. Sierra Leone has a long history of mining, We currently have large-scale mining starting with diamond mining in the 1930s operations for iron ore, rutile and and gold mining before that. Exploration bauxite across the country, producing results have revealed several mineral millions of tonnes of these minerals deposits around the country, including gold, annually. bauxite and rutile. The above, coupled with results from diamonds, stipulates that all diamonds While production of bauxite, rutile, ongoing exploration work, indicates that in the international market must be diamonds, and gold continues, several Sierra Leone is richly endowed with minerals accompanied by an authentic KP Certificate important exploration projects point deposits, which offer significant from a KP member state, and Sierra Leone to the wider prospectivity of the country. opportunities for high returns on has been a fully compliant country ever We are world renowned for the quality investment, and we welcome investors to since. explore these opportunities. We are a fully compliant country under Sierra Leone – at a glance Plans are well advanced to conduct a the Extractives Industry Transparency countrywide geophysical survey, which will Initiative (EITI), and we maintain an online be followed by geological field mapping, to repository, which ensures transparency in enable us to provide credible and reliable the licences administration and data to investors as a way of promoting management process. investment in the minerals sector. Under the New Direction, we have We are aware that it takes more than the committed ourselves to revising the Mines abundance of minerals in a particular and Minerals Act to ensure that it delivers country to attract investors, and that maximum benefits for our people, while investors require sufficient guarantees of a guaranteeing profitable returns on business friendly environment characterised investment, consistent with international by predictable laws, fiscal stability, best practices. transparency, security of tenure, etc. We shall also pursue policies aimed at That is why, under the New Direction, value additions to our mineral resources we have committed ourselves to key with a view to generating jobs and reforms, which include revising our additional income to Sierra Leoneans, minerals policies and laws, promoting and we are open to discussions with Population: 7,100,000 (July 2017 est) transparency and guaranteeing security for investors in this regard. Population growth: 2.38% our investors. Let me therefore take this opportunity Ethnic groups: Temne 35.5%, Mende Our country recently conducted peaceful, to assure you that Sierra Leone is 33.2%, Limba 6.4%, Kono 4.4%, Fullah 3.4%, free and fair elections in which my party, the undoubtedly the new destination for Loko 2.9%, Koranko 2.8%, Sherbro 2.6%, Sierra Leone Peoples Party, successfully investment in the mining sector on the Mandingo 2.4%, Creole 1.2%, other 5.2% wrested power from then incumbent All continent. Languages: English, Mende, Temne, Krio Peoples Congress. With a Government committed to Religion: Muslim 78.6%, Christian 20.8%, The peaceful nature of the election, and creating a friendly business environment other 0.3%, unspecified 0.2% the smooth transfer of power, the second in characterised by a fair and competitive Government: Presidential republic 10 years, is in itself evidence that we have tax regime; emerging human expertise Capital: Freetown consolidated peace and democracy in Sierra tailored to provide high quality service Legal system: English Common Law and Leone. and management regimes that meets Customary Law In the year 2000, we made history as the international best practices, improved GDP: US$11.5 billion (2017 est) first country to adopt the Kimberley Process and multi-purpose and multi-user Exports: US$$836.8 million (2017 est) Certification Scheme (KPCS) to regulate the infrastructure, we welcome you all to Imports: US$$1.564 billion (2017 est) trade in diamonds. get the unique experience of business Currency: Leone The KPCS, which aims to eliminate development and expansion in Sierra smuggling and the trade in conflict Leone under the New Direction.

Mining Journal • mining-journal.com • September 2018 3

03_Sierra_Leone_2018.indd 3 10/09/2018 15:35 SIERRA LEONE REGULATIONS Rethinking resource governance

National Minerals Agency Director General talks about new era for Sierra Leone minerals sector

Notwithstanding its relatively small size, Sierra Leone is widely recognised as a highly prospective target for mining activities. “Our country is richly endowed with min- eral resources such as chromite, iron ore, platinum, gold, diamond, bauxite, rutile, il- menite, zircon, base metals and rare earth el- ements such as columbite – tantalite (col- tan),” says Sahr Wonday, Director General of Sierra Leone’s National Minerals Agency. “Our key priority is to enhance knowledge of the full range of minerals in Sierra Leone. In this regard, we are providing support for the Extractive Industry Technical Assistance Project, the main component of which is the airborne geophysical survey to enhance general knowledge of Sierra Leone’s mineral potential. “This will accelerate development of the minerals sector. Planning is well underway with implementation planned for the last quarter of this year.” Sahr Wonday: “Good governance of the mining sector is critical for Sierra Leone to attract the Wonday says Sierra Leone’s mineral de- right kind of investment and fully maximise the potential benefits of its mineral endowments” posits “represent major opportunities for both potential investors and the country to “Limitations and inconsistencies in the ap- Wonday says this will include: derive significant benefits”. plication of legislative provisions, perceived l Revision of the key legislation pertaining The country’s mining sector has been the lack of security of tenure and transparency to the mining sector, such as the Mines & backbone of its economy since mining start- issues have in the past militated against Minerals Act in 2009, which legislates for the ed in the 1930s. In recent years, and prior to major players becoming interested in invest- protection of communities, corporate social the steep decline in the iron ore price, min- ing in the country. Our New Direction Gov- responsibility, improved licence manage- ing revenue as a percentage of National ernment will change this.” ment with the Cadastre office, among other Revenue Authority revenue was around the Wonday says Sierra Leone should learn things. 20% mark. Mining sector output as a per- from countries such as , Australia l Ensuring transparency in the sector by centage of gross domestic product also ex- and Canada. upgrading geo-data information manage- ceeded 20%. These countries have taken steps to pro- ment system, which aims to manage geolog- In 2017, the four operating large-scale mote good governance of the mining sector ical information by developing a geological mining companies – Tonkolili Iron Ore, Sierra and integrate it into local value chains. database, building a network infrastructure Rutile, Sierra Minerals, and Koidu – paid a While, Botswana ensured the establishment and a website portal where pertinent infor- total of US$52 million to the NRA and other of a diamond polishing industry in the early mation about the extractive industry in government agencies and employed more days of its diamond boom, Canada and Aus- Sierra Leone can be easily accessed. This will than 6,000 people. tralia established mineral processing indus- include tax and other contributions from the “Notwithstanding this significant contri- tries. Coupled with clear legislation, good mining sector. Compliance with the Extrac- bution to the economy, our New Direction policies, a stringent legal and institutional tive Industry Transparency Initiative will also Government recognises the fact that Sierra framework, and effective regulation to im- be a high priority. Leone needs to show more for our mineral prove good governance, the countries have l Address conflicting mandates of MDAs wealth. We must reverse the resource curse since derived significant values from their and ensure effective co-ordination. and ensure that Sierra Leoneans derive max- mining industries. imum benefit from our mineral wealth,” “Good governance of the mining sector is “We will implement an internationally Wonday says. critical for Sierra Leone to attract the right competitive tax regime that is mutually ad- “The mining sector should play a critical kind of investment and fully maximise the vantageous for both investors and our gov- role in supporting our development agenda potential benefits of its mineral endow- ernment. This will provide fair and accom- and to this end we are committed to sup- ments,” Wonday says. modating taxes, thus ensuring a win-win porting the creation of an enabling environ- “We will therefore establish a strong and situation, whereby mining contributes to the ment for mineral sector investment for the robust governance framework for the min- sustainable development of our country and benefit of our people. ing sector that balances the financial bene- its people, as well as ensuring good returns “A key priority is to ensure that our fits produced for government and the pri- for investors,” Wonday says. licence-management process is very trans- vate sector with the protection of “We will support investors by developing parent with allocation of mineral rights communities and the environment. clear and accessible guidelines for invest- based on strict eligibility criteria designed “We will put in place the legal, regulatory ment. towards attracting only credible investors and institutional capacity for the effective In this vein, parliament has enacted an Ex- with proven track records. management of the sector.” tractive Industries Revenue Act to consoli-

4 September 2018 • mining-journal.com • Mining Journal

04_05_Sierra_Leone_2018.indd 4 10/09/2018 15:35 SIERRA LEONE

date the fiscal requirements of our investors. fication and broad-based development. ment Agreement model will form the blue- All existing Mining Lease Agreements will “Furthermore, we will align our national print for community arrangements between also be reviewed to address the current situ- mining policies with regional and continen- mining corporations and communities going ation where concessionary tax regimes have tal plans such as the African Mining Vision forward. Mining companies will contribute not benefited the country. and adhere to international best practice as at least 1% of their gross revenue to a com- “A mining company should not be an ‘en- outlined in the Natural Resource Charter. munity development fund. clave operation’, with minimal backward or “We will continue to upgrade and main- “This will provide funding for education, forward economic linkages required to stimu- tain our infrastructure, in partnership with health, and general development of mining late economic activities in other sectors of the the private sector, to attract future invest- communities. We must learn from recent ex- economy. We will give high priority to strict ment in the country.” perience in our iron ore sector and plan for a enforcement of our local content policy and Wonday says community development is time when revenue streams from the mining ensure that mining companies train local staff also a centrepiece of Sierra Leone’s New Di- sector decline. and increase use of local contractors. rection for minerals. “We will therefore pay close attention to “Linkages between the mining sector and “We will ensure that our investor partners compliance with the Public Financial Man- the rest of the economy, through infrastruc- recognise that they have a responsibility to agement Act and application of the fiscal tural development, local content and their host communities,” he says. rule to manage the use of mineral resource downstream processes are crucial for diversi- “In line with this, our Community Develop- revenues.”

EXPLORATION Country-wide survey to start in October Geophysics data to provide vital new insights into Sierra Leone’s geological terranes

known geology. The surveys will be flown A comprehensive nationwide airborne geo- within the six months’ dry season from No- physical survey of Sierra Leone is to start in vember 2018 to April or May 2019. October this year after the Government of The GoSL has called for bids for contractor Sierra Leone received international funding services for the aeromagnetic/radiometric sur- support for the programme. vey, the electromagnetics survey and for the The government under the Extractive In- supervision and provision of quality control dustries Technical Assistance Project 2 (EITAP for the integrated surveys. 2), a World Bank funded project, has secured funds for a countrywide airborne geophysical Geodata management policy survey. This survey will add new knowledge to The valuable geological data/information pro- and significantly improve the understanding duced will increase investor interest not only of the country’s geology and mineral occur- in the mining sector but also in other sectors rences. such as agriculture, rural planning and water Sierra Leone’s mineral sector is considered resources. EITAP 2 has plans to strengthen to be of immense untapped potential and this the country’s Geodata Information Manage- survey will aid geological and structural map- ment System so that the NMA will be able to ping, as well as directly detect some mineral provide “basic and reliable geological informa- deposits. tion to facilitate the promotion of private The latest national geological map was investments in the mining sector, identify compiled in 2004 by the Council for Geo- areas that may be reserved and to support the sciences for the Geological Survey of Sierra planning of the socio-economic development Leone (GSSL). Existing data based on geologi- of the country”. cal mapping of parts of the country by the A data management policy that would pro- GSSL and the British Geological Survey be- Airborne geophysics data has played a vital vide guidelines for the collection, storage, use tween the 1950s and 1970s was used, but no part in stimulating mineral exploration in and dissemination of the country’s geodata, ground-truthing was done. Some areas have countries around the world including the airborne geophysical data, is never been mapped, meaning there are vary- been prepared and would require approval ing levels of detail in the current map. netic susceptibility, topographic and depth-of- from the government, including the legislative Knowledge about the geology of the coun- weathering data and to hold consultations branch. try is therefore limited with very little modern with mining and exploration companies. The six-month national geophysical survey data available. Priority areas for geological The study concluded that detailed aero- adds to efforts to create greater awareness of mapping will be selected based on the inter- magnetic/radiometric survey is justified with Sierra Leone’s mineral endowment, and stim- pretation of the airborne survey. selected blocks in the gold and diamond min- ulate investment in greenfields exploration ac- ing areas flown using electromagnetics. The tivity, and caps a period of significant adjust- Survey specifications survey will be flown at low altitude, preferably ment of the country’s mineral-sector GeoFocus (Pty) South Africa was contracted to 50m or less above ground depending on safe- governance. chart and prepare the groundwork and design ty considerations. The flight line spacing for The Sierra Leone government has, in the for a successful survey. the aeromagnetic/radiometric survey is 150m, past five years, supported the closure of It held consultations with the National while that for the electromagnetics is 200m. gaps in the legal/regulatory framework, Minerals Agency (NMA) and did a detailed GIS The surveys will be flown at 45o to the west established the National Minerals Agency study of available geological data including of longitude 12o W, and at 315o to the east of (NMA) and strengthened the institutions previous airborne surveys conducted by com- longitude 12o W. These line directions were se- responsible for the management of the panies. Field work was done to collect mag- lected so that they cut across the strike of the mineral sector.

Mining Journal • mining-journal.com • September 2018 5

04_05_Sierra_Leone_2018.indd 5 10/09/2018 15:35 COMPANY PROFILE SIERRA RUTILE MINERAL SANDS

Storied past, future potential for Sierra Rutile World’s largest natural rutile deposit supports long-term production plan IERRA RUTILE, A WHOLLY owned subsidiary of Iluka Re- sources, is a leading mineral sands company, operating world-classS assets in Sierra Leone. The company produces high- quality rutile and ilmenite from the world’s largest natural rutile deposit, located in the Bonthe and Moyamba districts of Southern Province. With an operating history span- ning more than 50 years, Sierra Ru- tile is one of Sierra Leone’s oldest and most storied resources compa- nies, enjoying a strong affinity with the country and its people. The company has undergone sev- eral evolutions since its inception in 1967, and the most recent of these was its merger with Iluka in Decem- ber 2016. Iluka is investing substantially in global marketplace, with end-use ap- Iluka is an international mineral Sierra Rutile and plans to increase plications that are part of everyday sands company with over 60 years’ production from current levels of life. From paint to aeroplanes; sun- experience and expertise in explora- about 150,000 tonnes per annum screen to smartphones, Sierra Rutile’s tion, development, mining, process- to between 250,000 and 275,000 products are present in pigments, ce- ing, marketing and rehabilitation. tonnes per annum over the coming ramics, metal, catalytic con- The company is listed on the Aus- years. Expansions at Lanti Dry and verters, fuel cells, water purification tralian Securities Exchange and head- Gangama are already underway, and fibre optics, to name but a few. quartered in Perth, Western Australia. with commissioning planned for As part of Iluka, sustainability at With operations in Australia and Sier- 2019. A definitive feasibility study Sierra Rutile means integrating eco- ra Leone; projects in Australia, Sierra has begun for a new mine at Sembe- nomic, environmental and social Leone and Sri Lanka; and a globally hun, with final development subject considerations into business prac- integrated marketing network, Iluka to Board approval. tice; and ensuring safe and respon- is the world’s largest producer of zir- Sierra Rutile employs more than sible conduct underpins everything con and rutile. The company is also a 2,000 people and its workforce is the company does. major producer of synthetic rutile, an over 98% Sierra Leonean. As a ma- Group-level sustainability frame- upgraded form of ilmenite. jor employer, the operation has a works have been implemented at Sierra Rutile has a resource life of commitment to local content and Sierra Rutile, with a focus on safety, at least 20 years, with exploration procurement. It occupies an impor- environmental management and activities that are ongoing. Key fea- tant role in Sierra Leone’s national anti-bribery and corruption. Above: Iluka tures of the current operation in- economy and the local economies of The operation emphasises land re- Resources clude three mines – Lanti Dredge, Bonthe and Moyamba in particular. habilitation as an essential part of its is investing Lanti Dry and Gangama – a mineral More than simply a source of em- operating model; and has adopted substantially in separation plant and associated in- ployment, Sierra Rutile provides a ‘back to basics’ approach to safety, Sierra Rutile to lift frastructure. world-class mineral products to the including personal accountabil- production from ity, understanding risks, incident and about 150,000 hazard reporting and the wearing tonnes per annum of appropriate personal protective to more than equipment. Once complete, the large 250,000tpa capital upgrade of Sierra Rutile’s in- frastructure will also enhance worker Left to right: safety. A stakeholder Following extensive consultation, engagement Sierra Rutile has recently put in place meeting in a Community Development Agree- Sembuhun; Sierra ment and a Community Develop- Rutile’s Gangama ment Committee, which will govern processing plant how the benefits of the operation

6 September 2018 • mining-journal.com • Mining Journal

06_07_Sierra_Rutile_profile_2018.indd 6 10/09/2018 15:35 Q&A: Rob Hattingh Rob Hattingh speaks with Mining Journal Rob Hattingh is the CEO of Sierra Rutile. He has led the company since its merger with Iluka Resources in December 2016; and is also a member of Iluka’s executive management team. Rob took some time to speak with Mining Journal and share some of his thoughts and experiences about what it is like to run one of Sierra Leone’s biggest companies.

Mining Journal: What has struck you most in your first 18 months as Sierra Rutile ‘I think what has Chief Executive? Rob Hattingh: In merging with Sierra Rutile, struck me the most Iluka took over a mature and well established is the warmth and business, with local expertise in mining and processing mineral sands. generosity of the I think what has struck me the most is the Sierra Leonean warmth and generosity of the Sierra Leonean Sierra Rutile-built footbridge linking the people; the dedication of our workforce; and villages of Higima and Nyandehun in the Imperi people; the the pride of place Sierra Rutile holds among Chiefdom dedication of our the local, and indeed, national community. Some members of our team have fam- confidence that the local knowledge and workforce; and the ily members that have worked here going experience of the Sierra Rutile workforce, pride of place Sierra back several generations. It is humbling to combined with Iluka’s technical expertise, will think of the resilience of the many thou- grow the operation to the benefit of all of its Rutile holds among sands of Sierra Leoneans that have plied stakeholders. the local, and indeed, their craft in this community over the past 50 years to make the operation what it is today, MJ: Your previous experience includes national community’ sometimes under the most challenging of leading Iluka’s Sustainability Group, how – ROB HATTINGH conditions. do you approach sustainability at Sierra CEO I was joined by a small group that relo- Rutile? cated to Sierra Leone from Australia fol- RH: I think it is important to note that Iluka’s lowing the merger. We have been wel- approach to sustainable development comed enthusiastically and feel privileged is applied by the company in all of the to have become part of Sierra Rutile’s jurisdictions in which it operates. Since history. the merger with Sierra Rutile, we have implemented group-level frameworks MJ: What are your priorities over the next with respect to safety, environmental two years? management and corporate governance. SIERRA RUTILE RH: Our number one priority is to deliver on These are essential elements of our business. AT A GLANCE the substantial programme of capital invest- Sustainable investment in our local com- ment and expansion we have in front of us. I munities is also important and, to provide a am pleased with the improvements and en- recent example, we have constructed a 60m hancements to current operations that have footbridge over the Lanti dredge pond to link occurred over the past year and half. The the villages of Higima and Nyandehun in the task now is to build on this momentum and Imperi Chiefdom. The bridge provides for the expand production considerably, in line with safe movement of people and motorbikes be- our plans. tween the two villages and is a demonstration While I have no doubt that we will of Sierra Rutile’s commitment to social perfor- encounter challenges along the way, I have mance outcomes that are mutually beneficial.

are shared with local communities. sicians to provide routine screening OWNED BY Sierra Rutile supports the Jackson of diseases to its workforce and their Wholly owned subsidiary of Iluka and Devon Anderson (JADA) Techni- immediate dependents. Resources (ASX: ILU) cal Institute and the Ruby Rose Edu- Sierra Rutile promotes the fun- cational and Resource Centre, both damentals of fitness for work and HEAD OFFICE important community hubs in close conducts a number of initiatives and Level 23 140 St Georges Tce, Perth proximity to the operation. talks to enhance health awareness Western Australia 6000 Tel: +61 8 9360 4700 The Sierra Rutile clinic is an impor- among the workforce. Fax: +61 8 9360 4777 tant part of the company’s social per- Sierra Rutile has a proud history in formance. The clinic is equipped to Sierra Leone and the company, along SIERRA LEONE handle a wide range of health tests with all of its stakeholders, is looking 110 Wilkinson Road, and collaborates with specialist phy- forward to a bright future. Freetown, Sierra Leone

Mining Journal • mining-journal.com • September 2018 7

06_07_Sierra_Rutile_profile_2018.indd 7 10/09/2018 15:35 SIERRA LEONE EXPORTS The stunning 709.41 carat Peace diamond was one of two huge special stones recovered in Sierra Leone in 2017

Diamond, gold exports dip in 2017

Plenty of upside for two key Sierra Leone commodity exports

Sierra Leone diamond exports dipped Artisanal production with a volume of average price per carat for diamonds in volume and value in 2017. The Sierra 183,216.54 carats, valued at US$79.08 increased to a new high of US$426.11, an Leone National Minerals Agency (NMA) million, accounted for 63.40% of the total increase of 47.24% [from the $289.39/ct reported a 22.51% fall in diamond exports. Kimberlite production of 105,762.19 average the previous year]. exports for 2017 versus 2016, with total carats, worth US$44.05 million, contributed “The general price per carat index diamond exports for the latest year at 36.6% of the export total. steadily remained at above $300 per 288,978.73 carats worth more than The NMA said mêlée and industrial carat but jumped to over and above US$123 million. category diamonds accounted for 88% of $500 in the last two quarters of the The average price per carat received total exports. year under review due to the rise in during 2017 was US$426.11. “Indications are that the run of mines diamond prices in the last six months A total of 179 Kimberley process (ROM) trend did shift a bit in the melees and of 2017.” certificates were issued to facilitate the industry categories, relative to the year 2016. The NMA said with recent investment by exports. There was a 17.37% carats drop in the Koidu Ltd in expansion of its operations, “it is The country’s total 2017 diamond melees category and a corresponding hoped that the coming years will see more production haul included 166,594.57 carats 18.12% increase in the industry category,” than double the export figures of the of gem diamonds – 58% of the total – and the agency said. previous years”. 122,384.16 carats of industrial diamonds. “Although there was a drop in volume of 27.23% in the special stones category, Gold its value was the highest across all Sierra Leone gold exports for 2017 totalled categories. 142.06kg, down 24.31% on the 2016 level. “This can be attributed to the value Gold exports last year were worth US$5.2 attained by the two special stones – million. the 709.41ct Peace diamond owned “In all, 16 exporters participated in 2017,” by the government, and the 476.97ct the NMA said. Prosperity diamond owned by Meya “Only 67 certificates were issued to Mining. expedite the exports.” “With the fluctuations in the world market An averaged of US$1,140/oz was price for diamonds and the huge showing received for the 4,567.81oz of gold on the two special stones, Sierra Leone’s exported in 2017.

8 September, 2018 • mining-journal.com • Mining Journal

08_Sierra_Leone_2018.indd 8 10/09/2018 15:35 SIERRA LEONE LEGAL Clamp down on illegal mining

New focus on comprehensive regulation of mining, environmental practices

The Ministry of Mines and Mineral Resources and the National Minerals Agency (NMA) have embarked on a clampdown on illegal mining activities across the country. They say illegal mining is a deterrent to economic growth and development as it deprives the government of much needed revenue. The illegal miners usually engage in environmentally harmful practices. In 2016, the Strategic Environmental Assessment report and a World Bank study estimated that illegal artisanal and small-scale operations employ between 100,000 and 400,000 miners. The NMA is recruiting and training mines monitors and wardens in a bid to strengthen its provincial capacity to effectively patrol and monitor these remote mining areas. It is also putting provisions in place for improved working incentives for mines and customs officials. Reduced illegal mining will lead to the growth of corporate mining activities, which will increase output and the government’s revenue from the minerals sector. It will also ensure that mining activities are done in a responsible and sustainable manner.

LEGAL GOVERNMENT Cancellation of Review of the Mines mineral rights and Minerals Act of 2009 The Ministry of Mines and Mineral Resources The Government of Sierra Leone (GoSL) (MMMR) and the National Minerals Agency under the Extractive Industries Technical (NMA) have revoked 40 licences whose Assistance Project 2 (EITAP 2), a World Bank- mineral rights holders have not been funded project, has called for bids from meeting their financial and other statutory consulting firms to review the Mines and obligations. Minerals Act (MMA) of 2009. These licences are in some of the most According to the GoSL, “the scope prospective areas of the country and these and reach of the MMA 2009 cannot mineral rights holders have failed to comply, accommodate new and emerging legislative despite repeated warnings. reforms in other sectors that have direct and, This move is expected to attract new in some respects, indirect bearing on the investors with the capacity to meet their mining sector”. obligations. A revised MMA would consider public According to the Minister of the MMMR, private partnership and promotion of local Dr Morie Manyeh, most of the revoked content to unleash the potential of the licences were held by people who could not mining sector to create jobs, generate afford the required taxes and exploration increased revenues, engender infrastructural Agency, the Environmental Protection costs and were only using the licences to development and support economic Agency and the National Protected Area entice investors. diversification. Authority. He said licence holders should deserve Investors and other concerned parties Some of the laws governing artisanal them and have the capacity to operate have noted the MMA 2009 lacks clarity on mining have also proved difficult to adhere them as this will increase government some provisions including aspects of the to and a review would empower artisanal revenue and boost the country’s foreign relationships between the Ministry of Mines miners, which in turn would help reduce currency earnings. and Mineral Resources, the National Minerals smuggling.

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Sierra Leone diamonds are among the most valuable in the world. The country is working to diversify its mineral revenue base, and expand mining Photo: National Minerals Agency EXPLORATION Promise to prospectivity

New initiatives set to shine a stronger light on Sierra Leone’s mineral prospectivity

Sierra Leone’s promise as a mining two of the country’s five operating mines President Bio has also been clear about his destination is unquestionable, but fortune at the time shut down. goals for rejuvenating investment in the has not been in the country’s favour in But the country’s mining industry will sector. recent years. soon take a major step forward in the form “My government has committed itself to A landslide killed 1,000 people in the of countrywide, reliable and accessible create the right environment to convince capital Freetown last year, Ebola struck geophysical data. The airborne survey will investors to take that great leap to invest in a in 2014 as the country was still only a kick off later this year and start delivering sector that is already under siege and in a decade removed from civil war, and when results in mid-2019, likely bringing more continent renowned for its unpredictability,” the bottom came out of the iron ore price, explorers and allowing current players in the he said. country to make sure they’re getting the “An environment where international most out of their land packages. investors can be confident that they will There are still relatively few public have the support of government to navigate companies with a Sierra Leone project as the pitfalls and take advantage of their principal offering, but between ASX- opportunities for creativity and innovation.” listed Iluka Resources and explorers coming The seriousness of this approach was in, investors will have more and more shown by the cancellation of 40 exploration options to get into the rising jurisdiction. licences which the National Minerals Agency The new government of His Excellency decided were not likely to be developed. President Brigadier (Rtd) Julius Maada Bio, Those cancelled licences represent an who was elected in April, has made several immediate opportunity for serious investors, positive steps already for prospective but there will also be significant amounts of investors. In his first speech to parliament geological data arriving next year for those after taking office, President Bio was open willing to wait for the World Bank-backed about the challenges facing miners and his airborne survey and mapping project. NMA Director General Sahr Wonday: “We want new government in Sierra Leone, outlining The government says it will promote the to try to make sure that the investor gets a the hit to the country’s growth rate (down new data around the world at mining good return on the investment but also as a from 6.3% in 2016 to 3.5% in 2017) when conferences, confident in the survey’s power country we benefit from our mineral wealth” operations shut down. to attract foreign explorers.

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Sierra Leone has had to look on while g/t Au over 1.2m and 8.6 g/t Au over 2m, as neighbouring countries developed a name part of a 5,000m drilling programme. Dr Kelvin FE Anderson in the resources industry – Cote d’Ivoire has ABM is looking a for joint-venture or farm- plenty of big players exploring; Liberia has out partner for the project. overcome Ebola and now hosts a continually The director of Sierra Leone’s Geological improving gold mine in New Liberty; and, Survey, Prince Cuffey, said the airborne Guinea is moving along with a bauxite mine survey could also turn up new metals for the and refinery, even as Simandou remains country. stalled. “From historic data that we have, there is a copper anomaly somewhere in northern Geology: what we know so far Sierra Leone,” he said. “There is potential for The current insight into Sierra Leone’s nickel and cobalt [as well].” geology comes from broad- The airborne magnetic and brush estimates, project- “My radiometric survey will cover specific exploration, artisanal government the whole country at 150m operations and historic surveys. line spacing and an EM survey The British Geological has committed (with 200m line spacing) will Survey wrote a frank analysis itself to create focus on the Sula-Kangari of the situation after a visit greenstone belts, the earlier this year. the right kimberlite zones, and the “Sierra Leone is a resource- environment Nimini and Gori Hills rich country, with extensive greenstone belts. Dr Kelvin Anderson (pictured above) is a geo- known and potential mineral to convince This move has been helped scientist with over 15 years’ experience, hav- and petroleum resources,” the investors along by the World Bank, ing worked as a geologist and geophysicist BGS team wrote. which has put in US$20 million in diverse operating environments in West “However, knowledge about to take that in funding. and Central Africa, including Sierra Leone. the geology of the country is great leap” The mapping phase itself He has led prospecting teams that have ex- limited, with very little modern will also be incredibly plored remote areas of this region for dia- data in the public domain, and this hinders important for bringing more explorers into monds, gold and iron ore. sustainable development of these resources the country. for the national good.” The BGS said it would be a big step up As Sierra Leone has long been a producer from the currently available data. “We need investors in of gold, diamonds and iron ore, geologists “Most work on natural resources in Sierra the gold industry to are in the unusual position of being able Leone depends upon the 1:250,000 national to find promising orebodies by looking at geological map of Sierra Leone,” the BGS come and help with the where artisanal and some industrial miners team wrote. artisanal workings” are already exploiting deposits. “This map is now often treated as being Geoscientist Dr Kelvin Anderson, a lecturer accurate, despite the fact that it has clear at the geology department of Fourah Bay shortcomings.” Dr Anderson recently served as National College in Freetown, said the country’s Consultant for two countrywide projects in known kimberlite pipes are only in the east Current operations Sierra Leone, that is, for GeoFocus (Pty) but there had to be more. The assessments of the current geological South Africa, who were contracted to chart “Even though diamonds have been found knowledge might indicate there is very little and prepare the groundwork and design for in the north and south, we only know of going on in the Sierra Leone mining a successful airborne geophysical survey, diamondiferous kimberlites in the eastern industry, but that’s nowhere near the case. and for the Environmental Protection Agen- side of the country,” he said. National Minerals Agency data from 2017 cy, where he was responsible for all geologi- “When I was working for Stellar Diamonds, shows 6.5 million tonnes of iron ore, 277,000 cal and technical aspects of the Artisanal we did some exploration in the south … and carats of diamonds, 1.8Mt of bauxite and and Small-scale Gold Mining Overview. there was so much that was indicative of 222,000t of ilmenite and rutile were He also has a university professional ca- kimberlites, but no diamondiferous produced in Sierra Leone. reer, having worked as a lecturer in the De- kimberlites. Kimberlite has been found down Iron ore numbers have dived since partment of Geology, Fourah Bay College, in the south, but it is not diamondiferous. Shandong Steel and Iron shut down its University of Sierra Leone. He holds a mas- “[Artisanals] are mining diamonds down Tonkolili operations last year. ter’s degree in Geo-Information Science and there, so there must be kimberlites that are Diamond numbers should be up this year Earth Observation, with specialisation in Ap- not yet discovered.” as the BSG Resources-owned Koidu is back in plied Geophysics, from ITC, University of Dr Anderson, who has consulted on the production after a move underground. Twente, Holland, and a PhD in Earth Re- airborne survey, said there would also likely The Koidu head of technical services, Miles sources from Camborne School of Mines be extensions of the greenstone belt. Van Eeden, said the project had reached (CSM), University of Exeter, UK. “We know that the gold is in the throughput of 80,000 tonnes per month greenstone belt, but the greenstone belt has after 15 months of downtime during the whole new environmental impact assessment not been mapped in detail,” he said. transition. and participation workshops,” Van Eeden said. “We have the main greenstone belt, but The move to sub-level caving caused The company’s community work has long we know gold is also found in the north.” some consternation locally, but moving to a been a feature of the operation; during the African Battery Metals (ABM, formerly Sula new mining method has prolonged the Ebola crisis, Van Eeden and his colleagues Iron & Gold) has found plenty of gold in the operation, which has been in production were faced with the choice of staying or north. since the early 2000s. leaving and shutting the mine down. Its most recent drill results from the “Going underground has been a learning “I think it was in our best interests in the Sanama Hill area of the Ferensola project in curve for the company itself as well as for the company to stay open and operate September 2017 delivered intercepts of 19.3 country, because we had to embark on a normally,” he said.

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Sierra Leone’s National Minerals Agency is working closely with the country’s government on delivery of a fairer royalty system - part of a platform that shows the public the industry is providing public as well as corporate benefits

“If [the mine] closed down the entire At Sierra Rutile, the company is currently handed out by the previous government, community would have fallen apart. doubling the capacity of the Lanti and and closing the permitting process for new “From a social community point of view as Gangama dry mines from 500-600t per hour players are a few of the actions taken so far. well, all factors considered, we decided to to 1,000-1,200tph by 2019. This is part of a NMA Director General Sahr Wonday said put systems in place so that it would be a large expansion programme which will see these were necessary steps to get the going concern.” safety and sustainability upgrades made at industry back on track. The rewards are clear in the region. existing operations and also consider the “What we’re going to be looking at is The neighbouring Meya Mining operation Sembehun project, which is currently the trying to align [the MLAs] with international sold a 476-carat rough stone to Laurence subject of a definitive feasibility study. best practice,” he said. Graff for $16.5 million at the end of 2017. Iron ore has had a trickier time in recent “We want to look at how much of that It wasn’t the first big diamond found in the years; price weakness and demand for cake is divided – how much goes to the area: the Star of Sierra Leone was also from higher-grade ore led to Shandong shutting shareholders, how much goes to the central nearby, and is the fourth-largest gem-quality Tonkolili. government, how much goes to the local stone ever found at 969ct. Nearby Marampa was also hit by the price communities – because depending on how Looking at the county’s bulk mineral fall resulting in the collapse of its owner. you tweak the permits, then it will shift one production, rutile has been a consistent New licence and rights were issued and way or the other. performer, with Sierra Rutile now part of awarded to the former offtaker of the mine “We want to try to make sure that the Iluka Resources. Gerald Metals, which plans to start investor gets a good return on the Following this acquisition in 2016 Iluka has producing again by the end of the year. investment, but also as a country we benefit boosted its cash flow and reduced its debt Craig Dean is head of Gerald and its from our mineral wealth.” considerably on the back of improved subsidiary SL Mining. He said Marampa Wonday, who worked for Sierra Rutile for market conditions for mineral sands. would come back into production at a good more than 30 years, said communities in time. “By the end of the year, we should mining areas also needed to better commission and put the mine back into understand the industry. production for 2Mtpa of high-grade “How we strike that balance is going to be concentrate with greater than 65% Fe the challenge. Because the perception out content,” he said. “We’re fortunate because here in Sierra Leone is that the public is the resource is quite good.” not benefiting much from our mineral wealth and it’s all going to the investors, and Getting permission so on. That’s the general public perception,” The government of Sierra Leone made several he said. bold moves this year in the mining sector. “I’m not saying that’s necessarily the case, The cancellation of the 40 licences, but we need to provide supportive evidence Sierra Rutile mineral sands dredging operations freezing mineral lease agreements (MLA) to show the country is actually getting a fair

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share of the wealth that is created by this investment and then that will go a long way Sierra Leone’s potential for large gem-quality diamonds towards addressing those public concerns.” Three large diamonds weighing 709.48 carat, 476.89 carat and 144.12 carat (figure below) were On top of the MLA work, the government found in in 2017/18. The 709.48 carat ‘Peace diamond’, one of the top 20 largest has already brought in a new extractive diamonds ever found, and the 144.12 carat diamond, were recovered by artisanal miners. The industry act, in line with getting mining 476.89 carat ‘Prosperity diamond’ is of exceptional quality ($34,599 per carat, see table below) companies onto a single, transparent tax and was recovered by Meya Mining from bulk sampling kimberlite within its property, adjacent arrangement. to the Koidu Mine. Diamonds produced in Sierra Leone last year ranked in the top 3 of the Wonday said bulks would have a royalty price/carat index according to the Kimberley Process Statistics, 2017. Some other large finds rate of 3% under the act. along with their price/carat are given in the table below. The legislation has set the rate for diamonds Large diamond finds worth more than $500,000 at 8% and those worth less will have a rate of 6.5%. Precious Carat 969.80 770.00 709.48 532 476.89 283 249.25 188 144.12 125.80 metals are listed with a royalty rate of 5%. Year 1972 1945 2017 1943 2017 1996 1943 1996 2018 2014 Price / Carat ($) 2,578 9,162 34,599 4,579 6,502 Table: Some large diamond finds including the Star of Sierra Leone (969.80 carat) and the Woyie River diamond (770 carat). Navigating the new rules The 476.89 carat was recovered from kimberlite and the others from alluvial deposits SL Mining received its MLA at the end of the last year, and while all MLAs are being Potential for the discovery of kimberlites reviewed by the new government, Craig The 476.89 carat diamond is a testament to the potential of the country’s kimberlites for large Dean said he has confidence to move for- gem-quality diamonds. There has been up to 2km of erosion of the land surface since most ward with bringing the mine back into pro- kimberlites intruded around 70-to-150 million years ago and this has resulted in extensive allu- duction and investing as much as $300 mil- vial sources of diamonds that have been mined for over 70 years. The main kimberlite occur- lion “as we have good government support rences are in the East, ie, Kono District, and the Tongo area of , south of Kono. and completed all formalities in accordance Others are the barren kimberlites in Gorahun, Kenema District, and Lake Popei in the south. Al- with applicable law”. luvial occurrences are known in the north and south and kimberlitic indicator minerals (KIMs) “Elections happened in March, there were have been recovered there meaning they may have their own kimberlite sources. For example, some meetings we went through in April there are widespread KIMs around the Zimmi area in the south which is renowned for yellow and May, and after we had the first official diamonds and this points to a new as yet undiscovered kimberlite cluster. There are parts of the meetings, we got comfort right away and country that are relatively under explored and based on the spread of KIMs and alluvial dia- said let’s pull the trigger,” he said. mond workings, there are likely to be new sources which remain to be discovered. The dia- “Where we are now, I do feel we got very mond potential of SL remains relatively untapped due to lack of exploration but this may be good support. The bottom line is if you get aided by the proposed countrywide airborne geophysical survey. the mine up and running, it creates jobs.” Marampa will likely be employing around Figure: Three 1,000 locals by the end of the year. large diamonds Dr Anderson from Fourah Bay College said recovered in the government crackdown on those sitting 2017/2018 on licences was very positive. “With those licences cancelled, this is the appropriate time to come in and look at what’s been cancelled,” he said. Reflecting on the current industrial-scale operations in the country, Dr Anderson said a system wherein some government official Prospectivity to prosperity production did not match the resource profile. would not have access to the data and start There is still a long way to go for Sierra “It’s a bit weird we don’t have any gold doing deals with people, who come and take Leone’s mining industry. mines in Sierra Leone,” he said. over the most prospective areas.” But with the support of institutions such “We need investors in the gold industry to Sierra Leone has previous experience in as the World Bank, Adam Smith International come and help with the artisanal workings.” using policy to change the industry for the and the British Geological Survey, along with New gold prospects should come as the better. The Kimberley Process led to more beefed up membership of the Extractive airborne survey results roll in. diamonds being sold through official Industries Transparency Initiative, the Craig said Gerald Metals would be channels, according to Dr Anderson, who country should be able to move quickly watching keenly. also studied artisanal mining intensively. towards a mining sector based on large- “It goes without saying that with the size “Our investigation shows us that most of scale, sustainable operations. of investment we’re putting in the country the gold is being smuggled into Guinea,” he The skills base is there at the management we would be highly interested in being able said. “From the diamond side, it’s a level, with a strong geology tradition (seen to work, explore and exploit more within completely different story thanks to the in people like Dr Anderson and Prince Sierra Leone,” he said. Kimberley Process. Cuffey), and industry experience coupled “I know [the government is] going through “That has forced even the artisanal miners with policy expertise (Wonday) working a campaign now and pulling permits, so I’d to bring their diamonds to the government under a leader keen to change things, this is say they are trying to crack down and legiti- for export.” a positive time for the country. mise things a bit more, which is a good thing.” Anglo American subsidiary De Beers is also Mining can bring major developmental Dr Anderson said one critical piece of work trying out a technology-backed solution changes to poverty-stricken countries if the as the airborne survey got underway would called ‘GemFair’, which involves supplying right processes are in place, as shown in a be the geodata management system artisanal miners with tablets and tamper- recent International Council on Mining and currently before cabinet. proof bags. Metals report. “The data would grant immense power They log their finds through an app, and It’s now up to the Sierra Leone and knowledge to whoever is going to be in then the diamonds’ supply chain journey government to follow through on its big control of it,” he said. can be tracked all the way to the boutiques ideas and allow miners to turn some of that “They should give people equal access … of London or Hong Kong. mineral promise into prosperity.

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10_13_Country_profile_2018.indd 13 10/09/2018 15:34 SIERRA LEONE GOVERNANCE Rules engender certainty around small-scale and artisanal mining Government policies aimed at ensuring adequate regulation of key sector

A sweeping review of rules governing small- so as to maximise benefits to the nation as a approval to participate in Artisanal mining of scale and artisanal mining in Sierra Leone whole”. precious, industrial, and sand-based miner- has created a regulatory environment con- Regulations specify key requirements for als. ducive to achieving the level of open com- artisanal miners as: l In addition to the registration, a co-opera- petition, continuity and security of tenure l Application for an Artisanal Mining tive shall apply for an Artisanal Mining that can maximise benefits of the activity to Licence shall be submitted in the prescribed Licence and must fulfil the condition set the nation. application form. forth for the application of the Prescribed Changes recently introduced were also l An Applicant for an Artisanal Mining Licence. designed to minimise smuggling of pre- Licence shall be allocated available mining l Where an Artisanal Miner is to be spon- cious, industrial and sand-based minerals land (not encroaching on area of other Min- sored by a Financier, such Financier shall that previously plagued the sector. eral Rights Holders) by the Chiefdom Mining show proof of his/her financial ability to According to Sierra Leone’s Ministry Allocation Committee before it is processed undertake the mining venture and may be a of Mines and Mineral Resources, the and issued by the National Minerals Agency Licensed Dealer or an Exporter. A Financier livelihoods of more than half a million (NMA). Artisanal mining may be facilitated without a Dealer/Exporter’s Licence shall not people in the country depend on small-scale on areas of other Mineral Rights Holders only be allowed to handle any of the precious, and artisanal mining activity, which also with the permission of such Mineral Rights industrial, and sand based minerals recov- generates revenue for government and an Holders who shall inform the NMA for its ered from the mining operations but may “appreciable amount of economic activity” concurrence. facilitate the sale of such Precious, Industrial, beyond that directly connected to the l An applicant for an Artisanal Mining and Sand Based Minerals to a Licensed minerals recovered. Licence shall provide evidence that he pos- Dealer or Exporter. Sierra Leone’s strengthened and more sesses sufficient capital and mining experi- l All Financial Supporters of Artisanal Min- transparent regulatory structure covers ence to undertake mining in accordance ing Licence Holders shall register with the not only artisans and small-scale miners, with the Artisanal Mining Provisions pre- NMA regional office, and shall pay a registra- but also the dealers and exporters of scribed in the Mines and Minerals Act 2009. tion fee of Le 250,000 per acre. minerals produced. l An Artisanal Mining Licence shall be l Heavy earth-mining machines such as The government had “decided to granted to (i) in the case of an individual Excavators, dredges, etc, shall not be regulate the Small-Scale and Artisanal only to a Citizen of Sierra Leone; and (ii) to a employed in Artisanal Mining Licensed areas Mining sector in a manner that ensures Co-operative registered in Sierra Leone and shall target alluvial deposits only (and open competition, continuity and security under the Co-operatives Act Cap 253. not Kimberlite deposits). Pit depth shall be of tenure, and minimises smuggling of l All such co-operatives shall be registered limited to 10m. Precious, Industrial and Sand Based Minerals with the National Minerals Agency for l Mining shall be carried out in an environ-

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mentally friendly manner. All such mining miners due to the miners’ inability to secure requirements of the relevant provisions out- operations shall be closely monitored by the the high initial investment capital required”. lined in the Local Content Policy and the NMA to ensure best mining practices are “It is against this background that the immigration and labour laws of Sierra Leone employed by all. Peace Diamond Alliance Project has been before they are allowed to enter the mining l An Artisanal Mining Licence shall be valid launched to encourage the formation of areas. for such period, not exceeding 1 year and mining co-operatives that can be provided l An applicant for the grant of a Small-Scale may be renewed for further periods not with mining equipment and machinery as Mining Lease: exceeding one year at a time. well as food for work, required for the artisa- l Shall be accompanied by a plan of the l Tenure and Renewals shall be subject to nal mining operation,” the Ministry says. area, over which the Licence is sought, the holder’s fulfilment of the conditions “The project has been tried in Kono, and drawn in such manner as the Director may required by the Mining and Environmental there are plans to extend to Tongo and other require; Regulations in force. parts of the country.” l Shall state the period for which the lease l The area covered by an Artisanal Mining The Peace Diamond Alliance Project has is sought; Licence shall not exceed 5 acres. The area also started training artisanal miners in the l Shall give a statement with particulars of must not encroach on any other Mineral Kono district in the art of valuing diamonds the programme of proposed mining opera- Rights Holders area without their permis- to enable them to negotiate the best market tions, including the treatment method and sion. prices for their winnings when selling to the type of equipment/machinery to be l An Artisanal Mining Licence holder shall dealers or exporters. employed in the operations; pay a prescribed rehabilitation fee to a reha- l Shall submit to the Environment Protec- bilitation fund that will be utilised to defray Requirements for small-scale mining tion Agency (EPA) and a copy to the NMA, the cost of rehabilitation and reclamation of Under Sierra Leone’s regulatory reforms, proposals for progressive reclamation and mined out areas. proposed small-scale mining companies rehabilitation of land disturbed by mining l An application for an Artisanal Mining must be a wholly-owned Sierra Leone Com- and for the minimisation of the effects of Licence shall pay all other fees before the pany registered in Sierra Leone under the mining on surface water and underground issue of his Licence. Companies Act 2009, or a body-corporate water and an adjoining or neighbouring l An Artisanal Mining Licence shall be incorporated in Sierra Leone with a mini- lands for consideration and approval revoked if, (i) within a period of three mum of 25% Sierra Leonean shareholding, before the commencement of any mining months no mining operations have com- preferably held by the Community in which operation; menced under the said Licence or its the proposed mining area is located. l Shall be accompanied by a report on the renewal; (ii) the Holder fails to fulfil the con- Key rules governing such companies in- proposed marketing arrangements for the ditions required by the Artisanal Mining pro- clude: sale of the minerals (Precious, Industrial, visions of the Mines and Mineral Act; and (iii) l All such bodies corporate shall be required and Sand Based Minerals) recovered. the holder contravenes any provisions in the to register with the NMA for approval to par- l The area covered by a single Small-Scale regulations and Policy. ticipate in Small-Scale Mining of Precious, Mining Lease shall not exceed 100 hectares l The holder of an Artisanal Mining Licence Industrial, and Sand Based Minerals and pay and must not encroach on areas of other shall be required to sell his proceeds to a the specified fees. Mineral Rights Holders. licensed Dealer or Exporter only and not to l An applicant for a Small-Scale Mining l An applicant for a Small-Scale Mining another licensed miner. All such transactions Lease shall be allocated available mining Lease shall pay all fees before the issue of shall be recorded on a sales card and pro- land (not encroaching on areas of other Min- the lease. duced for inspection by the Director of eral Rights Holders) by the Chiefdom Mining l A Small-Scale Mining Lease shall be Mines or an Authorised Officer. Allocation Committee before the grant of revoked if (i) within a period of three months the lease by the Ministry. mining operations have not commenced Support for artisanal miners l In addition to the registration, a company under the said Licence or its renewal thereof; The Ministry of Mines and Mineral Resources shall apply for a Small-Scale Mining Lease (ii) the holder fails to fulfil the conditions says the Sierra Leone Government also and must fulfil the conditions set forth for required by the small-scale mining provi- intends to re-activate an assistance scheme the application of the prescribed Licence. sions in force; (iii) the holder fails to submit aimed at helping artisanal miners to “restore l A Registered Mining Company with for- reports as outlined below. rights of complete control over mining oper- eign participation may employ a prescribed l The holder of a small-scale mining lease ations within their mining claims and number of expatriate workers to supervise shall be required to keep accurate records of become less dependent on the supporters the operations of the mining in the field. all the winnings and sales/exports on site at who had hitherto usurped the powers of the Such expatriate workers must fulfil the all times and to submit every 6 months accu-

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Email: [email protected] | Tel: +232 (0) 88 821 821 | Website: www.jicholdings.com Sierra Leone office: 34 Charles Street, Freetown, Sierra Leone

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rate technical records of the operations in A Dealer’s Licence is issued for one year and US$7,500 for gold, and US$5,000 for the Licence in such form as may be pre- (with half-yearly licences issued in special industrial and sand based minerals. scribed. Records of winnings, sales and/or circumstances) and renewal is subject to the Exporters can employ buying agents ap- exports shall be submitted monthly to the dealer meeting performance targets set. proved by the Director General of the NMA Director of Mines through the NMA regional The Dealer is required to buy Precious, In- on the recommendation of the Director of office on the 10th day of the succeeding dustrial, and Sand Based Minerals only from Mines, and issued with the prescribed Ex- month. These records shall also be produced an Artisanal or Small-Scale Mining Lease porter’s Agent’s Certificate. Not more than for inspection by the Director of Mines or an Holder and sell to any Exporter, and cannot five (5) buying agent certificates are issued Authorised Officer. Diamonds recovered in buy from or sell to another Dealer. The Deal- under one Exporter’s Licence. small-scale mining lease operations shall be er must keep a record of purchases and sales Exporters can open foreign currency exported through the NMA under the Kim- of precious, industrial and sand-based Min- accounts in accredited commercial banks in berley Process Certification Scheme. erals acquired and to issue a numbered in- Sierra Leone to finance their operations and l Small-Scale Mining Companies shall not be voice/receipt for each purchase or sales to dispose of funds freely, but must show allowed to buy any precious, industrial, and transaction. evidence of importation of all foreign sand based minerals from miners or dealers, A Dealer must also submit monthly currency inflows, before exporting any but may sell to Dealers / Exporters only after returns of purchases and sales to the (precious) minerals. obtaining written permission from the Direc- Director of Mines through the NMA regional tor of Mines or an authorised Officer. office. Incentives l All renewals shall be granted subject to the Each Dealer can employ not more than A person who gives information leading to holder’s fulfilment of the obligations required five agents of Sierra Leonean nationality. the arrest of smugglers or illicit dealers of by the Laws and Regulations in force. On the recommendation of the Head precious, industrial and sand-based minerals l A Small-Scale Mining Lease Holder intend- of the NMA regional office, the Director is compensated with 40% of the value of the ing to operate a dredge shall take out a dredg- of Mines shall approve a Buying Agent goods confiscated. The identity of inform- ing permit on payment of a prescribed fee. and issue a Dealer’s Buying Agent’s ants is not disclosed. certificate on the payment of the Tourists who wish to purchase diamonds, Requirements for dealers prescribed fee. gold, industrial, and sand-based minerals as Dealers can apply for a prescribed Dealer’s souvenirs can obtain permission from the Licence on the recommendation of the Requirements for exporters Ministry on the recommendation of the NMA Director of Mines and the approval of the Export licence applicants can be individuals for such transactions. Director General of the NMA, and after the of any nationality or a registered company They can purchase and export diamonds payment of a prescribed fee. To be success- approved by the Minister of Mineral to maximum value of US$1,000, gold to max- ful they must be registered to pay the coun- Resources on the recommendation imum value of US$500, and industrial and try’s Standard Assessment Tax. of the Director General of the NMA. sand based minerals to maximum value of An Applicant for a dealer’s Licence is re- One-year Exporter’s Licences are issued by US$250. quired to contribute to monitoring and reha- the Minister of Mineral Resources on the Export duties shall be imposed in addition bilitation funds. payment of a fee of US$35,000 for diamonds, to a levy of 3% payable to NMA.

GEOLOGY Dredging remains a feature of Sierra Leone mining Rivers, beaches and lakes offer mineral opportunities from weathering of gneisses and amphibolites Sierra Leone has demonstrated potential for of the Kasila group, which remains largely both alluvial and beach placers concentrated under explored. This means there is potential in stream sediments, or beaches and lakes. for discoveries other than in Sierra Rutile’s The tributaries of some of the main rivers concessions. and lakes drain mineral rich areas such as the The coastal plains that connect known diamond fields of Kono and Tongo, the gold mineralisation stretching from Liberia to rich greenstone belts, the Kasila group of rocks Guinea are also a target for exploration, – which are the main source of mineral sands not only for rutile but also PGE. Other ore (rutile, ilmenite and zircon) – and the Free- minerals present in Sierra Leone with the town complex, which is believed to contain Sewa, Moa, Bafi and Mano rivers, while the propensity of forming placers are cassiterite platinum group elements (PGE). greenstone belts are mainly drained by the (tin), chromite and coltan. Depth of weathering is considerable in the Pampana, Teye, Taia/Jong and Mabole rivers. flat-lying western half of the country, which In some rivers, such as the Bafi and Teye, Current state of dredging contains mineral sands and , while the many of the diamond gravels and sands con- Dredging is currently being done by a few eastern and central areas are hilly and rugged. tain gold and both are mined with gold being small-scale mining companies, with Sierra This topography along with deep weathering the by-product. Getting gold from diamond Rutile running the only large-scale dredging and erosion of bedrocks has provided suitable mining is quite common in diamond mining operation. conditions for the production and deposition areas close to the greenstone belts, and these Locally made dredges are common among of placers. rivers have been dredged for both. artisanal miners, but a moratorium has recent- ly been imposed on such practices by the Na- Secondary gold and diamond Other placer deposits tional Minerals Agency as it goes against the The drainage systems of the diamond fields The predecessor of Iluka Resources/Sierra Mines and Minerals act of 2009. have been targets for dredging since dia- Rutile started using dredges to mine mineral There is also potential for dredging to be monds were first discovered in the Gbogbora sands in 1967 and the Sierra Rutile conces- used as means of providing construction sand stream, Kono District, in the 1930s. The main sions still host one of the world’s largest natu- to local contractors due to the depletion of rivers draining the diamond fields are the ral rutile deposits. The deposits are derived sand from local beaches.

16 September 2018 • mining-journal.com • Mining Journal

14_17_Country_profile_2018.indd 16 10/09/2018 15:34 SIERRA LEONE COMMODITIES Vimetco rejuvenates bauxite assets

Global aluminium producer looks at local benefi ciation options

Sierra Mineral Holdings 1 Ltd (SMHL) has have increased from 1.16Mt in 2014 to A feasibility study on two proposed been supplying bauxite to its parent 1.78Mt in 2017 and is scheduled to ramp up beneficiation routes – one to process live company, globally integrated aluminium its production and sales up to 2.02Mt in tailings from the current wash plant and a producer Vimetco, since 2008 when the 2018. SHML started its trial dry beneficiation second to process stock tailings from SMHL’s group acquired the Sierra Leone bauxite bauxite production and sales in 2018 to Gondama storage facility – has been assets of Sieromco. assess its commercial viability in the completed. Significant investment in the high-quality industry. The company has upgraded the road Sierra Leone resource and asset base has SMHL has also been investing in new network between the mining pits, seen significant production expansion in the mining equipment and river transportation beneficiation facilities, and the loading port, past five years. fleet, and the company has mounted a new, to facilitate rising production, and has also Sieromco started mining in Sierra Leone in aggressive exploration campaign to build upgraded conveyors and river-based 1963 and continued until 1995 when the out current mineral resources of about 31Mt. material handling systems. operations stopped as a result of the civil It has managed to finance most of these “SMHL’s team is ambitious and war in Sierra Leone. investments with internally generated cash determined to bring the first ever alumina The 321.7 sq km mining lease acquired by flow from the current operations. production plant in Sierra Leone,” the SMHL lies on the same belt as the world-class “Under the current leadership team, spokesperson says. Guinea bauxite deposits. With reserves to SMHL-Vimetco has been extremely “This will create opportunities to fully support at least a further 10 years of successful in meeting overall technical, optimise Sierra Leone’s bauxite reserve base production, and vast additional tailings pond organisational and most importantly utilisation through value-addition to reserves also suitable for beneficiation, SMHL financial goals of the company with the alumina hydrate and special alumina. To Vimetco is the only operational bauxite mine creation of value to the shareholders support a proposed alumina hydrate plant, in Sierra Leone and is the second-largest portfolio as well as making sustainable SMHL will build a thermal power plant with mining employer in the country. impact on the socio-economic development up to 10MW capacity.” The Sierra Leone bauxite of SMHL is used in the community and nation as a whole,” a The group has also invested in a number in Vimetco¹s alumina refining and aluminium group spokesperson says. of community projects in local chiefdoms, smelting facilities in Romania. SMHL¹s “SMHL has embarked on a number of including a major new multi-purpose Premium washed bauxite is considered to be ambitious technical and infrastructure conference and community centre, canteen among the top-quality feed products in the development projects that are in-lined with and cinema, power generation, and water world. SMHL bauxite is purely gibbsitic, the current industry trend of value addition borefield facilities. devoid of mono-hydrate (bohemite, etc) and creations that are expected to improve Full package scholarship awards for mineralogical phases, and most suitable for and optimise existing production chain by students to attend university and pursue low-temperature digestion processes. minimising wastages and keeping the mining course degrees has been another Since 2014, bauxite production and sales business processes lean and effective.” forward-looking SMHL initiative.

Vimetco – at a glance

Contact: 37 Wellington Street, Freetown, Sierra Leone. Tel: +232 76620210 Email: [email protected] Web: bauxite.vimetco.com

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14_17_Country_profile_2018.indd 17 10/09/2018 15:34 SIERRA LEONE DIAMONDS Building better communities

Koidu works to enhance Sierra Leone and regional sustainable development goals

Prior to the civil war, Sierra Leone had estab- lished an active mining sector built upon sig- nificant exports of diamonds, rutile and baux- ite. The sector underpinned much of the country’s formal economic activity, contribut- ing 20% of GDP, as much as 15% of fiscal rev- enues, and accounting for more than 90% of exports. Mining and quarrying provided a live- lihood for over 250,000 people, and employed about 14% of the total direct and indirect labour force. Despite the sector operating at only a fraction of its potential, its contribution was significant enough to qualify Sierra Leone as a resource-rich country. The end of hostilities marked the start of a strong economic recovery. “The provision of healthy and safe workplaces for our employees, our most valuable asset, is The diamond mining sector has played an one of our fundamental responsibilities” instrumental role in Sierra Leone’s nascent economic recovery. Official exports have in- port revenue with diamonds accounting for Since its inception Koidu Limited has been creased to 582,000 carats in 2006, with 84% 46% of export revenue in 2008. committed to responsible and ethical dia- of this amount being mined by artisanal and The Ebola outbreak of 2014 and 2015, com- mond mining. small-scale miners. bined with falling global commodities prices, Four of the top-20 largest rough diamonds The World Bank has estimated that up to caused a significant contraction of economic recovered globally were unearthed in Sierra 40,000 people are directly engaged in mining activity in all areas. In 2017, increased ore ex- Leone, all of them recovered contiguous to for diamonds and that the associated popula- ports, together with the end of the Ebola epi- Koidu’s ground. tion of immediate family dependents could in- demic, supported a resumption of economic “This serves as an additional booster for clude 100,000-to-200,000 people. If those peo- growth. stakeholder and investor confidence, which ple that are indirectly dependent on artisanal To ensure optimal contribution to national currently benefits the state and operators diamond mining through forward and back- development, the Sierra Leone Government is alike,” a Koidu spokesperson said. ward linkages are included, the World Bank es- committed to promoting transparency and In 2009 Koidu embarked on a bankable fea- timate reaches 200,000-400,000 people de- accountability. In 2014, Sierra Leone became a sibility study (BFS) that would later form the pendent upon artisanal mining for the greater country compliant with the Extractive Indus- basis of an expansion project. The BFS was car- part of their livelihood. This represents 4-8% of tries Transparency Initiative (EITI) process. The ried out to attract further investment from the the population. Peace Diamond Alliance (PDA) was created stakeholders and shareholders by defining the In recent years, economic growth has been and the Kimberley Process Certification resources hosted within the mining conces- principally driven by mining. The country’s Scheme (KPCS) implemented, all fostering a sion within an acceptable level of confidence. main exports are iron ore, diamonds, and ru- stable and conducive environment for effec- The BFS defined the resources available, tile, and the economy is vulnerable to fluctua- tive, legal and transparent mining practices. through the extraction of kilometres of core tions in international prices. The mining indus- Koidu is 334km east of Freetown, the capital which was studied – down to a microscopic try accounted for 4.5% of the country’s GDP in city of Sierra Leone, and falls within the Kono level – and modelled in 3D to assess the feasi- 2007 and minerals made up 79% of total ex- district. bility of continued open-pit mining. This 3D

Koidu Limited – at a glance

Ownership: Privately owned by BSG Resources Limited (BSGR) through its subsidiary OCTÉA Limited Established: 2003 Address: 84 Wilkinson Road, Freetown, Sierra Leone Tel: +232 78 874 912 Fax: +232 22 230 467 Web: www.koiduholdings.com Koidu supports education through granting of scholarships in various fields of studies, benefiting more than 280 Sierra Leoneans since 2011

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geological model formed the crux of the fu- ture of the mine and confirmed the viability of the expansion project. Once the resource was defined within the acceptable range of confidence, the expan- sion project was rolled out. The basic mine plan outlined open-pit mining with four cut- backs on the K1 resource, and open-pit min- ing with two cutbacks on the K2 resource. Once the mine plan was concluded along with the mining rates, optimisation of the pro- cessing plant design was finalised. Since an upgrade of the existing 50 tonnes per hour (tph) plant was not deemed feasible, a new processing plant and associated infrastructure were designed and built, which enabled a Koidu provides direct local employment to more than 800 people higher throughput capacity and a quicker re- turn on investment. limiting waste production, safety, incorporat- “A new site for the planned construction of In 2016, following the completion of open- ing sustainable technologies to promote the the next 72 houses has been demarcated and pit mining on the K1 and K2 pipes, the com- wellbeing of local communities, curbing emis- the completion is expected by the end of Au- pany transitioned to underground mining op- sions, and improving environmental sustain- gust 2018.” erations. The fourth cutback on K1 was ability. Committed to the SDGs, the company Koidu supports operations related to pre- deemed uneconomical with the strip ratio at has benefitted from improved relationships serving and developing water resources, a key 27:1. But the three completed cutbacks ena- with the government of Sierra Leone and the contributor to environmental sustainability. bled more than 3Mt of ore to be mined to various communities in which it operates. The company provides water facilities in the about 300m vertical depth from the open pit. “Our most important responsibility is to ful- resettlement areas and affected communities K2 saw two cutbacks and about 2Mt of ore fil the expectations of our stakeholders and to and undertakes thorough environmental im- mined to circa-200m depth. continuously improve our social, environmen- pact assessments before conducting any min- The transition from open pit to under- tal, and economical performance while ensur- ing operation to avoid diversion of natural re- ground at K1 is well underway and Koidu has ing the sustainability and operational success sources and minimise the environmental developed more than 6km of underground of our company,” Koidu’s spokesperson says. impact of its operations. tunnels to service sub-level open stoping “The Corporate Social Responsibility (CSR) Since 2011, Koidu has provided over 280 underground operations. approach is our main guiding principle in this scholarships at various levels for local benefi- matter. We evaluate all of our operations and ciaries to enhance their educational objec- Enhancing the SDGs their impacts on the communities, in which tives. This support has helped beneficiaries to In September 2015, the UN member states we operate, while considering social, econom- advance their educational pursuits. agreed on a set of 17 Sustainable Develop- ic, ethical and environmental impacts. ment Goals (SDGs), which represent the global “With the co-operation of CSOs and NGOs Economic development agenda for equitable, socially inclusive, and in our operating region, we launched a num- Apart from the company’s taxation and roy- environmentally sustainable economic devel- ber of social projects focused on stimulating alty payments at local and national levels, opment to be reached by 2030. environmental awareness, preserving nature, Koidu contributes to the economic develop- Koidu Limited has the potential to signifi- and assuring sustainable development in our ment and growth of the country by leveraging cantly contribute to the achievement of the communities. on its investments at local level – building new SDGs in Sierra Leone. “The provision of healthy and safe work- infrastructure, introducing new technologies, Through its corporate social responsibility places for our employees, our most valuable increasing knowledge transfer, training and and its operations, the company promotes di- asset, is one of our fundamental responsibili- workforce opportunities. rect local employment to over 800 people and ties. We determined occupational health, safe- Formal education and specific vocational forward and backward linkages directly or in- ty and fleet safety as priority areas for im- training can lead to qualified jobs in this sec- directly associated with their employment, in- provement. tor. This know-how can then be used in other cluding family members of miners and those “With this in mind, we aim to strengthen parts of the industry/manufacturing sector engaged in miniature jobs for the miners, gen- our occupational health and safety depart- and support structural transformation in the erating increased labour opportunities. In ad- ment, through onsite training and equipment economy. dition, through its partners, contractors and provision.” The company plans to generate new eco- service providers, the company generates ad- Koidu conducts stakeholder engagement nomic opportunities for citizens and local ditional employment opportunities. efforts within the framework of national and communities, including jobs, training, and Koidu supports education through granting international principles and system applica- business development relating to mining op- of scholarships in various fields of studies, tions. “We support sustainable development erations, associated service providers, or new benefiting more than 280 Sierra Leoneans in communities where we operate and con- local economies linked to the mine. since 2011. tribute to the welfare of society through Vil- “This will help drive economic development Through the Community Development lage Resettlement Committees (VRCs),” the and diversification through direct and indirect Agreement (CDA) the company funds local spokesperson says. economic benefits and by spurring the con- projects in co-operation with communities. “A total of 357 houses have been complet- struction of new infrastructure for transport, Through partnerships with government and ed since 2012 under the Resettlement Action communications, water and energy,” Koidu’s civil society, Koidu ensures that benefits of the Plan RAP2 and residents within our operation- spokesperson says. mine extend beyond the life of the mine itself, al areas have been satisfactorily resettled. A “The company will continue striving to fostering a positive impact on employment total of 132 houses are presently under con- achieve the right balance between business generation, economic growth, environmental struction by 25 contractors employing over and social development, environmental pro- sustainability and social capital. 800 skilled and unskilled workers from the tection, sustainable development and invest- Koidu is committed to responsible mining, local community. ment promotion.”

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18_19_Sierra_Leone_2018.indd 19 10/09/2018 15:34 SIERRA LEONE DIAMONDS Newfield advances Tongo diamond development plans Project is regarded as ‘generational asset’ with significant potential for further discoveries

Early in 2018, ASX-listed Newfield Resources Newfield’s Tongo development plan will Newfield Resources – at a glance (NWF) merged with Stellar Diamonds, a com- be focused on achieving an underground pany listed on the London Stock Exchange mining operation on two of its 11 Head office: 15 McCabe Street, North (AIM), and raised fresh equity of A$40 million diamondiferous kimberlites by the latter part Fremantle, WA, 6159 to fund the accelerated development of the of 2019. Phone: +08 9389 8880 high-value Tongo diamond project in east- The development and mining phases of Fax: +08 9389 8890 ern Sierra Leone. the Tongo project will involve significant Email: [email protected] Key shareholders of Newfield have wide employment and training opportunities for Web: http://newfieldresources.com.au ranging business interests including prop- the local community. The project is regarded Directors: Anthony Ho, Michael Lynn, erty development, pharmaceutical, building as a generational asset with significant po- Robert Ang materials and education. tential for further discoveries and expansion Market capitalisation (August 24, 2018): The projects consolidated by the merger of its mineable resource. To date, over US$49 A$98.8 million are situated in the major diamond produc- million has been invested in exploration, ing areas of Sierra Leone and Liberia, with scoping studies and governmental approval l Drone surveys for detailed mapping of the the primary asset the high-grade Tongo pro- processes on the project. planned mine layout were flown, and pre- ject comprising two adjacent mining licenc- liminary mine site, plant, office and accom- es that cover more than 134 square kilome- FEED programme modation layouts have been prepared, tres and host 11 known kimberlites. The front end engineering and design based on the significant existing infrastruc- The project combines the kimberlite dyke programme (FEED) for Tongo started in the ture which includes roads, offices, work- hosted historical mineral resources on adja- March 2018 quarter and is being co-ordinated shops, stores, accommodation and the old cent mining licences. It is subject to a Tribute by independent consulting groups, Paradigm alluvial old plant site. Mining Agreement between the two mining Project Management and SRK Consulting. The l Design of a 50 tonnes per hour dense licence holders, being Newfield’s subsidiary FEED will more precisely define the technical media separation plant based on a second- company Sierra Diamonds Ltd and Octea requirements of the project and deliver an hand plant acquired from Octea has been Mining’s subsidiary company Tonguma Ltd. optimised underground mine design and completed. The plant will incorporate new Newfield also holds a 100% interest in the treatment plant layout. This work will also scrubbing and crushing units, and a com- Allotropes Alluvial Diamond Project on the refine the final capital expenditure estimate pletely new recovery section, incorporating Sewa River in the Southern Region of Sierra and operating cost budgets. primary and secondary Debtech (De Beers) Leone, and a 90% interest in exploration li- The mine is targeted to enter production CDX118CD (dry feed) X-ray machines. cences in northwestern Liberia, where high- in late 2019. The FEED programme is on l Geotechnical and geohydrological field- value diamonds and kimberlitic indicator track for completion in the December 2018 work was undertaken by SRK engineers, and mineral anomalies were delineated by previ- quarter. the sites of the underground portals for both ous exploration work. Activities completed to date include: the Kundu and Lando underground mines were selected. l Environmental monitoring and reporting has commenced. l Stakeholder engagement and commence- ment of Community investment initiatives have commenced. l Upgrading of the gravel road between Mano Junction and the Tongo Project was completed. This road is important to the logistical support for the mine. Travel time between the tarred road and the Tongo Pro- ject has been shortened from approximately 90 minutes to 35 minutes. l Refurbishment of a 5tph DMS plant for bulk sampling work, and addition of a dual X-ray recovery system was completed. This plant is currently processing a bulk sample to deliver initial carats for the updated Min- eral Resource estimation, and to improve confidence in the diamond revenue model. In addition, there are several thousand tonnes of kimberlite material stockpiled at the Project. Processing of this material will generate revenue for further project devel- Diamonds from the Tongo project recovered during sampling in 2012 opment.

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l Dismantling and relocation of the 50tph production plant from Kono to the Tongo Project was completed. Construction of the new plant will follow once new components arrive from South Africa. l Detailed underground mine design will commence August, once the geological model has been updated following comple- tion of the drilling programme.

Drilling and mineral resource update Boart Longyear was appointed to undertake a 10,000m mine development drilling pro- gramme to complement the FEED. Drilling was completed during July 2018. This campaign was designed to more pre- cisely delineate the geology and morphol- ogy of the Kundu, Lando and Tongo kimber- lites (and associated country rock) within the first two levels of planned underground min- ing. It is also expected to bring a fourth kim- berlite dyke (Kpandebu) into resource. This will facilitate more precise mine planning and thus assist in de-risking the initial phases of mining. The drill collars are at approxi- mate 50m intervals along the strike of the dykes, infilling previous resource drilling work that was at 200m intervals. Independent geological consulting group, MPH Consulting of Canada (MPH), has been retained to update the mineral resource esti- mate for the Tongo Project. The additional geological information provided by the cur- rent drilling campaign is expected to bring some shallow portions of the previous re- source into the indicated resource category, and to bring some previous Exploration Tar- get zones into the Inferred Resource category. The updated JORC-compliant mineral re- source estimate is expected to be completed in the December 2018 quarter.

Mineralisation and history Alluvial diamonds were mined at Tongo from 1956 to 1995, initially by Sierra Leone Selection Trust (to 1971) and subsequently by the National Diamond Mining Company. Work by the Sierra Leone Geological Survey in the 1960s and 1970s estimated that 1.6 million carats were produced in the first 10 years. However, it is estimated that up to 4.5 million carats were mined subsequently. Top to bottom: Newfield Resources projects in Sierra Leone and Liberia; Tongo diamond project Today, artisanal miners still produce dia- in Sierra Leone’s Kenema District monds from remnant alluvial deposits in the per tonne, and the average diamond values forge an effective partnership among all vicinity of the kimberlite sub-crops. But the were modelled at between US$197 and stakeholders. Objectives include develop- kimberlites themselves were only mined to a US$270 per carat. There are a further eight ment of a long-life mining operation that few metres depth in the weathered zone, dykes that have been discovered to date, will generate sustainable returns as well as and are therefore virtually untouched. and all of those tested are diamondiferous. provide significant economic benefits to Si- Delineation and resource drilling of select All of the dykes are open at depth. erra Leone and its local communities. kimberlite dykes, in combination with micro- Currently operational kimberlite dyke Newfield’s management team has over diamond and bulk sampling, was carried out mines in South Africa continue to operate at 150 years of combined experience in by Tonguma Ltd and Stellar Diamonds plc below 700m depth. discovering and developing diamond between 2011 and 2012. This data along mining operations. with the recently completed shallow drilling The road ahead The core values and culture of Newfield programme (to approximately 100m), is Newfield’s development plans for the Tongo drive application of the best standards of being incorporated into an updated mineral project will see the creation of another sub- technology, safety and environmental resource estimate. stantial mining operation in Sierra Leone. practices. Above all, we believe in treating Grades reported during the sampling pro- With strong support from local communi- our host country, its people and its lands grammes ranged between 0.8 and 2.7 carats ties and government agencies, Newfield will with the utmost respect.

Mining Journal • mining-journal.com • September 2018 21

20_21_Sierra_Leone_2018.indd 21 10/09/2018 15:33 SIERRA LEONE IRON ORE Marampa rebuild signals new era of co-operation Vision for high-grade iron ore project has key technical, community dimensions

The Gerald Group is one of the world’s lead- ing private commodity-trading companies. Over the past 55 years, Gerald has developed a successful track record in the physical mer- chanting, development, trade and financing of commodities and commodity-linked assets, with annual turnover greater than US$8 billion and assets exceeding US$2 billion across an expansive global footprint. In addition to the robust trading business, historically focused on base and precious metals, Gerald has developed an investment platform over the past several years to gain access to strategic offtake to feed its trading business. Gerald has leveraged its experience and vast network within the metals and mining sector with technical expertise and opera- tional capability, which has deployed in ex- cess of US$3 billion of financing into mines, refining facilities and logistics assets across the world. The group’s investment capability spans a variety of transactions across various Partial view of the Marampa processing facilities, which have been well maintained through a production stages and jurisdictions. care and maintenance programme implemented by Gerald, despite the harsh environment The team brings technical expertise, capi- tal and strong strategic partners. Other current assets include the Bisie Tin government understands the importance of Gerald has a successful track record in de- project in the Democratic Republic of the foreign investment and once SL Mining veloping early stage assets and bringing Congo, and the publicly listed Taiwanese pre- demonstrated its commitment and capabili- them into production. It brought the Soremi cious metals refiner Solar Applied Materials. ties, all governmental formalities were com- copper-lead-zinc project in the Republic of Although each project is unrelated, each pleted in order to ensure the Marampa min- Congo from early stage exploration to be- structured investment is expected to pro- ing project could get back into production come the first copper cathode producer in vide Gerald’s trading arm guaranteed offtake as quickly as possible on a sustained basis. the country’s history and continue to expand for years into the future. Another landmark SL Mining is working on rehabilitating and it with its strategic partner, China Gold. transaction was Gerald’s funding of the con- reconfiguring the project for a planned pro- In Russia, Gerald provided seed capital to struction of Tiger Resources Copper Cathode duction restart at the end of calendar year Russian Copper Company, to bring the plant in the DRC. 2018. The total resource of the project is esti- Mikheevsky Copper project from early stage mated at one billion tonnes of iron ore grad- development into production, and now ex- Marampa ing 32% Fe, with potential to expand the re- pansion, as one of the largest copper pro- SL Mining Ltd, a limited liability company source. The historical project includes three jects in the region. incorporated in Sierra Leone, is a wholly production assets, now obsolete, and associ- owned subsidiary of Gerald engaged in the ated infrastructure built by London Mining Gerald Group – at a glance exploration, development and production of between 2011 and 2014. iron ore concentrate. Its project is located in With the commitment to spend approxi- Marampa in the Port Loko District, the north- mately US$300 million to bring this defunct ern province of Sierra Leone. project into production with sustained out- SL Mining was awarded a renewable Large put of 6.5 million tonnes per annum of high- Scale Mining Licence (ML) granted under the grade concentrate grading higher than 65% Mines and Minerals Act, 2009 on March 2017 Fe, SL Mining’s investment will lead to mate- for a term of 25 years. The ML covers the sur- rial job creation in Sierra Leone as well as Revenue: c$10 billion pa face area that was once granted to London other direct benefits to surrounding commu- Assets: c$3 Billion Mining plc and is better known as the Mar- nities and much needed revenues for the Established: 1962 ampa project. government. Employees: 200 During 2017, SL Mining successfully nego- Head office: One Strand, Grand, Buildings, tiated a Mining License Agreement (MLA) History and operational turnaround Trafalgar Square, London, WC2N 5HR, UK which provides economic stability and inter- Gerald initially became involved in the Mar- Tel: + 44 (203) 805-2000 national protections that was ultimately rati- ampa mining project in November 2014 Web: www.Gerald.com fied by the government of Sierra Leone par- when it provided a large structured offtake liament on December 6, 2017. The credit facility to Timis Mining Corporation

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(SL) Limited (TMC), to ensure continuity of would give hope to the local community, re- construction time and a manageable invest- operations after London Mining went into tain local jobs, and provide a glimmer of ment programme to produce two million administration and the Marampa mining hope that this three-times failed project may dry tonnes per annum of high-grade con- project was transferred to TMC. However, have a future if under the right project man- centrate which will achieve plus-65% Fe,” the Marampa mining project never had the agement team. Craig says. opportunity to perform as intended and shut Once approached by the previous stake- “This initial phase will then be used as a down in March 2015, only months after TMC holders for Gerald to fund, Gerald immedi- stepping stone to build the second and larg- took over the project. ately put a plan in motion, starting with pro- er phase.” “After we lent the money, the plant perfor- tecting and maintaining the project assets, Without this phased out approach, the mance failed and never managed to pro- which can quickly degrade in a harsh tropi- project would have required 30 months for duce the grade we were looking for,” recalls cal environment and therefore need to be design, funding and construction. So it was a Craig Dean, CEO of Gerald Metals. This com- preserved for a hope of a restart. win-win plan for Gerald and the govern- ingled with extremely challenging market So in April 2015, following plant shut- ment, with a quick path to job and revenue conditions, the world’s worst Ebola out- down, Gerald started to fund a care and creation for the country. break, and lack of viable transport for its maintenance programme in order to try to product. safeguard its investment into TMC and en- Restructuring The Marampa project has a history of shut- sure that the Marampa mining project could While Gerald worked heavily on the turna- downs. The mine was originally exploited by be restarted in the future. The company has round plan, between London and South Delco, then London Mining, and finally TMC. always believed there was an important so- Africa, the group also focused on trying to The iron ore industry is also not one to cial aspect in that the Marampa mining pro- ensure a proper financial restructuring of the enter lightly as four producers control 80% ject once employed thousands of local peo- project. of the cost curve, with an ability to ramp up ple and the Sierra Leone government would It attempted to work with TMC’s lenders at will, giving this oligopoly a major influ- support a “new” investor who had a viable and other stakeholders with a view to reach- ence on prices. A smaller-scale iron ore pro- plan of restart and ensure protection of the ing a commercial solution to ensure the fu- ject that does not contain high-grade (>65% project site to generate current and future ture of the Marampa mining project, but no Fe) concentrate is destined for failure in the employment. agreement was ever reached. current market conditions, as the current Gerald was well advanced in a detailed Following the government’s cancellation market and forecasts dictate materially due diligence programme and analysed of TMC’s mining licenses, Gerald’s wholly- higher premium levels for quality product. every technical and operational report, con- owned subsidiary, SL Mining, applied for and So the Gerald team had to redesign and sulted with former project employees, re- received in March of 2017, a new large-scale reconfigure the previous project for future viewed cost scenarios, and thoroughly re- mining licence covering a similar area as the success. viewed the plant to establish what previous Marampa mining project. “When TMC shut down, we had a major conditions and configurations were needed SL Mining was awarded the licence follow- problem,” says Gerald’s head of operations for the Marampa mining project to be able ing the application process, which included for SL Mining. to restart. a viable plan for a quick restart and substan- “We stepped into a country that just got With a thorough review of equipment on tial due diligence on the Marampa mining struck with the world’s worst Ebola outbreak, site, supplemented by engineering test work, project, and is now the sole operator of the and had to deal with an asset that never re- the Gerald team identified a viable configura- Marampa mining project holding the ML, ally performed and had exhausted its tailing tion whereby new equipment would be MLA and land leases and which is now a feedstock. brought in and the flowsheet would be rear- debt free, unleveraged project. “TMC also had significant project finance ranged in order for the plant to produce from The plant and equipment, however, was debt overhang that rolled over from London a run of mine a true high grade concentrate still owned by TMC. But in July 2017, the Sier- Mining to TMC as part of the deal TMC nego- to be called “Marampa Blue”. ra Leone government, through the National tiated at that time. All those factors, includ- “We were able to define a configuration Minerals Agency (NMA), invoked Section 54 ing the massive historical debt, a project that that needed six months rehabilitation and of the Sierra Leonean Mines and Minerals Act, could not produce >65% Fe grade, and a plant that would become obsolete the min- ute it would exhaust its tailing resources, was doomed to fail. It appears as if the pre- vious project sponsors, London Mining, TMC, and the banks all depended on iron ore pric- es, which today we know was not a good strategy especially when prices collapsed from above US$100 per tonne to less than US$40 in 2015 and 2016.” When Gerald became involved on the ground in 2015, the sight was not pretty. “It was gloom and doom at some many levels, and not just with iron ore prices in the sub-US$40/t. It was clear that other than Gerald nobody wanted to deal with the Mar- ampa core issue that it was a project that failed once more, had no foreseeable pros- pect and yet required immediate care and maintenance funding to maintain security and integrity on site.” Gerald was the only project stake holder willing to deploy these significant sums of money in a depressed iron ore market, which The Marampa project power plant, which will need complete overhaul before restart

Mining Journal • mining-journal.com • September 2018 23

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Signing of EPC Contract with CNEEC on June 28, 2018, in Beijing by the Group CEO Craig Dean and Senior Vice President Frederic Lotti for Gerald, and by President Zhang Yanfei and General Manager Li Zhigang for CNEEC

2009 (ACT) by issuing a certificate to TMC. The local community leaders,” Craig says. creation of local employment and a new rev- government had been very transparent with “Reviving and creating a sustainable Mar- enue stream,” Craig says. all stakeholders of TMC and secured lenders ampa mining project was always their top In the first phase, the project will directly that it would enact section 54 if the previous priority and all their decisions were based on and indirectly create more than 1,000 jobs, owner did not reach a deal with SL Mining this principle and nothing else. increasing in the second phase to 2,000 peo- on the existing plant facilities. “They put Gerald through a very high level ple. SL Mining aims to source at least 90% of According to section 54, when a project of scrutiny at the technical, financial and fis- its staff locally, a highly improved ratio com- owner loses its mining licence, it is required cal level regarding the restart plan and op- pared to London Mining’s, and to implement to remove its plant and equipment from the eration. We have a lot of experience dealing a robust training programme for its workers. site. In turn, the NMA, if it deems such assets with governments in Africa and we’ve rarely necessary for the project care and mainte- seen anything like this. The government of Community nance, can elect to refuse such removal by Sierra Leone and the community leaders SL Mining recognises that engaging stake- issuing a certificate and pay “reasonable were highly demanding project stakeholders holders is crucial to the success of every pro- compensation” to the asset owner. Once the and we had a lot of respect for this.” ject and implemented a number of initia- certificate is issued, the new mining licence tives to improve the lives of the community holder, SL Mining, effectively becomes the Today and the future stakeholders. new title holder of the assets with obligation SL Mining has concluded an agreement with For example, while negotiating the MLA to reimburse the government when the pay- a Chinese state-owned enterprise to work on with the Sierra Leone government, SL Min- ment of the “reasonable compensation” the engineering, procurement and financing ing agreed to increase the royalty payment takes place. of the project. to the hosting community above the level The Sierra Leone government, and sepa- In June 2018, CNEEC (China Electrical Engi- historically paid by London Mining and TMC. rately SL Mining, engaged independent third neering Corp), Gerald, and SL Mining con- SL Mining’s involvement goes beyond its party consultants to perform a valuation in cluded an EPC and finance contract for the monetary obligations, with commitment to accordance with the ACT and estimate a construction of both phases of the project prioritise hiring of nationals in its work force. value for the “reasonable compensation”. for an overall investment programme of ap- In 2018, about 150 local villagers were This estimate came within a range of US$4 proximately US$300 million. hired to build fire belts and road repairs. In million to US$16 million and the government SL Mining’s plan has been to commission addition, about 300 nationals are currently is now in the process of finalising its process. this mine by the end of 2018, and executing on SL Mining’s labour force, which is expect- With TMC’s mining licence cancelled, loss this agreement helps ensure this goal will be ed to double by year end. of land lease rights, and with section 54 in- achieved. All of this was completed while An information centre in Lunsar was also voked, all project stakeholders, including there was a change in government from the set up by SL Mining in September 2017 to fa- Gerald, incurred substantial losses from the ruling APC party to SLPP under the leader- cilitate an exchange and grievance system. failure of London Mining and TMC. But the ship of Julius Maada Bio, the president of Some of the key community initiatives process followed by the Sierra Leone gov- the Republic of Sierra Leone. that SLM is working on include supporting ernment was legally thorough and very sys- “Gerald has only been welcomed by His construction of local primary schools, road tematic and will withstand potential legal Excellency and we look forward to full gov- and drainage rehabilitation, training, challenges it may face from the previous ernment support as we bring this project construction of water boreholes and project sponsors. back into production. His Excellency has pumping systems, and hosting of “Overall and throughout this process, we made key supporting statements to reassure community events such as a SL Mining- were very impressed by the GOSL and the SL Mining that his number one priority is the sponsored football league.

24 September 2018 • mining-journal.com • Mining Journal

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