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Sierra Leone Steels Its Ambitions

Jan 13, 2017

Eager to boost the national rebuilding process, Sierra Leone Ambassador to China Alimamy P. Koroma asked the Chinese company that purchased a major iron ore mine to move into processing the ore into finished products in the West African country.

Koroma made the appeal during a visit on Aug 23 to the headquarters of Shandong Iron and Steel Group Co Ltd in Jinan city. The company, commonly known as Shandong Steel, acquired 100 percent of the major Tonkolili Iron Ore Project mines and restarted production of ore about six months ago.

The mines had been shut down in 2014 and 2015 after the price of iron ore plunged and the Ebola outbreak became an epidemic that killed about 4,000 people in the country.

The Tonkolili iron ore deposit in the hills around Bumbun, Mabonto and Bendugu in the north of the country is the biggest in Africa and the third-largest in the world, according to Minister of Mines Alhaji Minkailu Mansaray.

SISG Vice-President Tao Dengkui expressed thanks to the ambassador for his visit. Tao says an improvement in the price of iron ore helped the company restart full operations in Sierra Leone, and assured him of the company's interest in sustaining their operations in the country in diverse areas despite the challenges faced.

Embassy officials say SISG told them they will consider the proposal regarding more processing in Sierra Leone, and will look at financial issues and other challenges.

The company originally had a 25 percent stake in African Minerals Ltd before buying that company out. It has invested over $1.5 billion in the Tonkolili project since 2012, Sierra Leone's government says.

Large-scale mining activities started in Sierra Leone in the 1920s after bauxite was discovered, and production of minerals such as diamonds, rutile (titanium oxide, used to coat welding rods), gold, bauxite and iron ore accounts for about 80 percent of the country's export revenue.

Mining companies have never produced finished products in Sierra Leone because of the lack of infrastructure such as electricity supplies and a good road network, and, in the past, some security threats, according to officials from the National Mineral Agency.

However, they note that the country is losing out on significant revenue when raw materials are exported and finished products are imported at a much higher price. They note that there is massive road construction going on across the country, and the electricity supply is improving. Since the end of the civil war 14 years ago, the country is peaceful and stable, they add.

The importance of the sector was demonstrated when Sierra Leone President Ernest Bai Koroma urged SISG to restart its operations.

"We cannot afford to wait any longer. A lot depends on the minerals sectors, and as we recover from the impact of the Ebola outbreak, our need for revenue from all sources and sustained employment for our people cannot be overemphasized."

Koroma, the ambassador, says processing the raw iron ore into a finished product in the country would not only boost the economy and create more jobs, but would eventually increase the company's production levels.

The ambassador's statement was seen as timely, given the comments of Chinese investors interested in overseas industrial investments, particularly in steel production.

"Shandong Steel is the largest single investor and employer in Sierra Leone and as such the country shall continue to put a premium to her relationship with the company. We shall continue to treat our relationship with you very seriously," Koroma says.