Sierra Leone
Mulls Mining Reforms, Royalty Hike
Sierra
Leone's parliament is considering a bill that would hike
royalties on the extraction of diamonds, gold and other precious
metals and give government the right to take a stake in big
mining projects.
The bill aims to
remedy the effects of years of mismanagement, corruption and
decade-old civil wars that have hamstrung the nation's mining
potential.
The Minister of
Trade and Industry, David Carew, says, ’’We want an act that
will bring predictability, consistency and sustainability to our
mining sector…We found out that over the years people were
negotiating their own agreements outside the mining act. As a
result there were various qualities of agreement inconsistent
with our policy, negotiated at a time when the country was
vulnerable.’’
The bill would
raise royalty rates, give government the option to take a share
in large projects, increase mining companies' obligations to
develop local communities and ensure they cannot sit idly on
cheap licences.
Among the new
proposals is a hike in royalty rates to 6.5 percent on
diamonds, up from 5 percent and to 5 percent on gold and
other precious metals, up from 4 percent.
Companies would
need to spend 0.1 percent of annual gross revenues on
community initiatives and new entrants would work under a new
non-exclusive "reconnaissance" licence, which will
replace the "prospecting" licence and is renewable only
once.
The vote on the
bill, on Tuesday, comes on the eve of Sierra Leone’s Trade and
Investment Forum in London, sponsored by the World Bank and UK
aid agency DfID, which the country hopes will attract a raft of
interest in the economy still emerging from its civil war.
Former British
Prime Minister Tony Blair, will attend the conference and
billionaire George Soros, who is investing in agriculture in the
country, will send a message of support.
In recent years
Sierra Leone has become one of the continent's top reformers,
keen to become investor-friendly and rising seven places to
30 over the past two years in the widely-viewed Ibrahim
Index of African Governance.
REUTERS/Yinka
