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Sleiti 2015 Eiti Report February 2018

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Sleiti 2015 Eiti Report February 2018 SIERRA LEONE EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE (SLEITI) SLEITI 2015 EITI REPORT FEBRUARY 2018 Boas & Associates Boas & Associates P. O. Box AT 1367 ACHIMOTA-ACCRA. Republic of Ghana Telephone: 233 244 32 6838 Email: [email protected] REPUBLIC OF SIERRA LEONE MINISTRY OF MINES AND MINERAL RESOURCES SIERRA LEONE EITI Report FEBRUARY 2018 Boas & Associates TABLE OF CONTENTS LIST OF ABBREVIATIONS/ACRONYMS ................................................................................................ i EXECUTIVE SUMMARY .......................................................................................................................... ii 1.0 BACKGROUND .................................................................................................................................... 1 1.2 EITI IN SIERRA LEONE................................................................................................................... 1 1.1 OBJECTIVES AND CONTENTS OF THE REPORT ...................................................................... 2 2.0: APPROACH AND METHODOLOGY ................................................................................................ 4 2.0 OVERVIEW OF THE EXTRACTIVE INDUSTRY IN SIERRA LEONE ........................................... 6 2.1: MINING SECTOR ............................................................................................................................ 6 2.2 LARGE-SCALE MINING OPERATIONS ........................................................................................ 7 2.3 OIL/GAS ............................................................................................................................................. 7 2.5 ROLES OF GOVERNMENT INSTITUTIONS ............................................................................... 11 3.0 OVERVIEW OF FISCAL REGIME .................................................................................................... 13 SUMMARY OF CORPORATE TAX (AFOREMENTIONED) AND OTHER COST ........................ 15 OIL/GAS SECTOR ............................................................................................................................ 15 3.4.2 Other Fiscal Requirements ......................................................................................................... 16 3.4.3 Institutions .................................................................................................................................. 17 3.5 LICENCE ALLOCATION ......................................................................................................... 218 3.5.1 Licence Registry ........................................................................................................................ 25 3.4.6 Major Companies in the Oil and Gas Industry – 2016 ............................................................... 26 3.5 CONTRACT DISCLOSURE ........................................................................................................... 28 3.6 BENEFICIAL OWNERSHIP ........................................................................................................... 29 3.7 STATE PARTICIPATION IN THE EXTRACTIVE SECTOR ....................................................... 30 4.0 EXPLORATION, PRODUCTION AND EXPORTS ........................................................................... 31 4.1 EXPLORATION UPDATE: ............................................................................................................. 31 4.2 PRODUCTION ................................................................................................................................. 35 4.2.1 Production Status of Major Mining Operations ......................................................................... 36 5.0 REVENUE COLLECTION .................................................................................................................. 40 5.1 REVENUE FLOW ............................................................................................................................ 40 5.1.1 MINING ..................................................................................................................................... 40 5.1.2 Oil/Gas ....................................................................................................................................... 44 OIL/GAS ................................................................................................................................................. 48 Boas & Associates 5.4 REPORTING COMPANIES AND EXTRACTIVE INDUSTRY ENTITIES ................................. 49 5.5 DISCREPANCY ............................................................................................................................... 49 6.0: OTHER REPORTING PARAMETERS ............................................................................................. 50 6.1: MANDATORY AND VOLUNTARY SOCIAL EXPENDITURES .......................................... 50 6.2: TRANSPORTATION PAYMENTS ............................................................................................... 50 6.3 QUASI-FISCAL EXPENDITURES ............................................................................................... 50 7.0 RECONCILITION…………………………………………………………………………………….51 7.1 RESULTS OF RECONCILIATION ............................................................................................... 54 7.2 REVENUE ALLOCATIONAND DISTRIBUTION OF REVENUE……………..…………..….64 8.0 CONTRIBUTION TO THE ECONOMY IN 2015 AND 2016 ............................................................ 65 8.1 EXTRACTIVES CONTRIBUTION TO GDP ................................................................................. 68 9.0 SUB NATIONAL PAYMENTS ........................................................................................................... 74 9.1 Diamond Area Community Development Fund (DACDF) .............................................................. 75 10.0 OUTCOMES AND IMPACT………………………………………………………………………..78 11.0 OBSERVATION AND RECOMMEDATION……………………………………........…………...80 12.0 CONCLUSION ................................................................................................................................... 81 APPENDICES ............................................................................................................................................ 82 Appendix 1: Revenue streams used for the determination of materiality in 2015 .................................... 83 Appendix 2: List of companies/ extractive industry entities that meet the materiality threshold in 2015 .. 84 Appendix 3: Out of scope companies/extractive Entities-2015 .................................................................. 85 2 | P a g e Boas &Associates LIST OF TABLES Table 3.1 Royalty rates applicable in the Mining Sector ............................................................................ 13 Table 3.2 Summary of selected Fiscal Application in Sierra Leone ........................................................... 15 Table 3.3 Summary of Fical Regime in the Oil and Gas Sector ................................................................... 16 Table 3.4 Types of Mining Licenses issued in Sierra Leone ........................................................................ 19 Table 3.5 Licences application for 2015and 2016 ....................................................................................... 21 Table 3.6 Sierra Leone Petroleum Licensing Update ................................................................................. 24 Table 3.7 African Petroleum Shareholdings ............................................................................................... 26 Table 3.8 African Petroleum group in Sierra Leone ................................................................................... 27 Table 4.1 Mineral Reserves in Sierra Leone ............................................................................................... 34 Table 4.2 Mineral Production in 2015/16 ................................................................................................... 35 Table 4.3 Iron tenements of Marampa ........................................................................................................ 37 Table 4.6 Total National Export (2012-2016) ............................................................................................ 38 Table 5.1 Revenue Streams ......................................................................................................................... 42 Table 5.2 Revenue flow during Scoping study ....................................................................................... 4444 Table 5.3 Scoping parameter for 2015/2016 SLEITI Report ...................................................................... 46 Table 5.4 Selected Mining companies for 2015 and 2016 listed below……………….........…………….46 Table 5.5 Revenue streams and receiving Government agencies………………………………………...47 Table 7 1 Unilateral Declaration……………………......…………………………………………………55 Table 7.2 reconciliation by Companies…………………………………………………………………...56 Table 7.3 Reconciliation by Revenue Streams……………………………………………………………57 Table 7.4 Extractive entity and discrepancies……………………………………...……………………..58 Table 7.5 Revenue Streams and discrepancies……………………………………………………………59 Table 8.1 Government revenues from Mining benefits in 2015 and 2016 are listed ................................. 66 Table 8.2 Employment Details
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