NMJD launches Cost Benefits Analysis

NMJD launches Cost Benefits Analysis on Mining Agreements

By Theophilus S. Gbenda

The Network Movement for Justice and Development (NMJD) with support from the German Technical Cooperation (GIZ) Tuesday 12^th July 2011 launched two separate reports relating to the cost benefits analysis of the African Minerals Limited (AML) and London Mining (PLC) mining contracts with the Government of Sierra Leone (GoSL), at a grand ceremony held at the British Council Hall, Tower Hill, Freetown.

The main thrust of the analyses is to highlight the financial costs and benefits of the said mining agreements and their impacts on the country and its people. 

The Reports provide those who are new to the subject with an overview of the gaps and limitations in the mining contracts signed between the GoSL and the two mining companies mentioned. Contained in the reports are strategic, direct and indirect cost benefits analyses of the contracts.

The London Mining agreement came into effect on 9^th December 2010, whilst the African Minerals Limited’s came into being on 20^th August 2010. The reports revealed flaws in the two mining agreements, and dismissed them as being ad variance with the provisions of the Mines and Minerals Act 2009 and other legislations including the Local Tax Act 2010.

The two contracts, according to civil society groups working on issues of mining, if allowed to go on as ratified, will amount to holding the country economically hostage and further reinforce the notion of national resource curse. Such agreements, according to NMJD, has the potential of derailing the process of strengthening the stability and peace in the country after a devastating and bloody decade-long civil war that had as its main fuel, diamonds.       

Launching the reports, President of the Sierra Leone Association of Journalists (SLAJ), Umaru Fofana, said the manner in which the Mines and Minerals Act of 2009 has been flouted to accommodate certain business interests that are not in any way beneficial to the country, is a major cause for concern.

Mr. Fofana further stated that the media should be the conscience of society and the defenders of the people and not to compromise or mortgage their integrity. Most journalists he said, compromise their profession by siding with mining companies and that a good number of journalists defend mining companies rather than the poor and defenceless citizens.

He called on colleague journalists to desist from such a practice, noting that they should put the interest of the country above their personal interests.

Executive Director of NMJD, Abu Brima, said the agreements should be thoroughly reviewed, pointing out that such arrangements only spell doom and undermine everything that has been done in the country to secure peace and work for change.

Mr. Brima went on to state that the country stands to lose huge tax revenues should the agreements in question are left to be implemented as have been signed, adding that the GoSL is violating its own laws through the heavy fiscal concessions it has granted to both African Minerals and London Mining.

The government claims that the country needs as much investors as possible, but at what cost, Mr. Brima asked, furthering that the low royalty and tax concessions the government has granted to the companies are perfect examples of how the country has been placed at a totally disadvantaged position insofar as beneficiation from mining is concerned.

The tax concessions, Mr. Brima stressed, directly contravene the provisions of the laws of the land including the Local Tax Act 2000 and the Mines and Minerals Act 2009.

According to Mr. Brima, the study conducted and the reports that followed, are a conscious effort to access what Sierra Leone as a nation is giving away in light of what it receives in return. Mr. Brima also pointed out that based on the findings, the cost of these agreements far outweigh the benefits.

NMJD, Mr. Brima stressed, came up with the analyses so as to ensure that the attention of the government is drawn to the numerous flaws contained in the London Mining and African Minerals agreements and what the country stands to lose should those agreements are not reviewed in line with the development aspirations of the nation. Mr. Brima said the reports are also geared towards letting the government change its negative culture of not listening to the voices of the civil society.