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NOTICES & DOCUMENTS  

London Mining Company Limited
By
Apr 13, 2010, 17:06
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London Mining Company Limited

9th April, 2010
Chairman
Sierra Leone People’s Party
15 Wallace Johnson Street
Freetown

Dear Sir,



APRIL 8, 2010 PRESS STATEMENT ON THE LONDON MINING AGREEMENT

I write as a citizen of Sierra Leone who is currently not a registered member of any political party, but intends to fully participate in the constitutional processes designed to safeguard our collective welfare.

I also write as a first hand witness of the process leading to the unanimous ratification by Parliament of the "Mining Lease Agreement Between The Government of Sierra Leone and London Mining Company Limited".

I note with dismay that your press release of April 8, 2010 includes a section on the subject Agreement which is misleading, contains factual inaccuracies and, in my humble opinion, ill-serves the greater welfare of the citizens of this country, including members of your party.

Your assertion that the London Mining Agreement "undermines the primacy of the rule of law" is just plainly false. This Agreement and the process by which it was ratified, was crafted with the assistanceof some of the best legal minds and policy experts in the country. The legality of that process, experts tell me, is enshrined in the Constitution of the Sierra Leone, which is the ultimate parent law in our country. Section 40 (4) of the Sierra Leone Constitution, 1991, Act No.6 of 1991 clearly authorizes

the President (or his designees) to enter into agreements ("... without prejudice to any such law as from time to time be adopted by Parliament...") provided such agreement "... shall be subject to ratification by Parliament ...". The London Mining Agreement, having been duly ratified by Parliament following execution by Government, all as prescribed by the Constitution, is legal, subject to its own statutory regime and recognizes, but certainly cannot be said to contravene other laws,

including the Mines and Minerals Act of 2009.

You further assert that the Agreement "... undermines ... stability and investment confidence which are necessary to improve the poor standard of living of majority of Sierra Leoneans...". On the contrary, it is the lack of circumspection in the misleading statements about this Agreement, from representatives of what one should assume would be a responsible opposition party, that surely undermines investor confidence and threaten to undo the enormous net benefits to Sierra Leone of reopening the Marampa Iron Ore Mines which has been closed for over 30 years. I bear direct witness to concerns raised by credible investors in this case, who would like to be reassured that your statement does not mean that investing in Sierra Leone is subject to the very political risk which the clause 3(a) of the Agreement seeks to allay. This clause, which you quoted in your press release, is aimed squarely at minimizing the risk of future capricious political actions which would seek to change the investment climate from what obtained when the investment decision was made. When read together with the definition of "Minerals Act" as found on page 2 of the Agreement ( "the Mines and Minerals Act 2009 of the Laws of Sierra Leone, including any legislation amending the same or substituted thereof and all rules and regulations

from time to time in force thereunder"), it is clear that the Agreement seeks not to circumvent the Mines and Minerals Act of 2009 (as you assert), but to ensure stability of the investment climate from the vicissitudes of politics. That notwithstanding, the Agreement, which was negotiated well before the passage of the Mines and Minerals Act of 2009, does comply with all important provisions of said

Act such as protection of the environment, payment of royalties, community development, transparency, preference in hiring Sierra Leoneans and procuring goods and services through Sierra

Leonean companies.

Indeed clause 6(c) of the Agreement, which re-asserts the statement in clause 3(a), is identical (save for the name of the company) to that found in mining lease agreements approved by prior Governments led by the SLPP. Also, since nothing in the Constitution of Sierra Leone or the laws enacted thereunder (including the Mines and Minerals Act of 2009) precludes it and, considering the benefits of a stable investment climate engendered by such provisions, your criticism in this case

smirks of anything but sincere motives.

All told, the London Mining Agreement is legal and paves the way for resumption, after a 30-year hiatus, of iron ore exports from the Marampa Mines early next year. Without the Agreement, there would have been no investment decision to re-open the mines and I leave my fellow citizens, including your own Party members, to judge the merits of your position which would deny them the following benefits from London Mining Company:

1. Payment over the next 10 years of over $200M (two hundred million US dollars) in new revenue to the Government, in spite of the fiscal incentives granted to the company in the Agreement. Revenue which would enhance Government’s ability to provide social services, build infrastructure, pay salaries and generally develop the country
2. The injection of an additional $40M (forty million US dollars) or so each year into the Sierra Leone economy, in the form of mine operating expenses
3. The creation of 1,000 to 2,000 new, well paying and sustainable jobs for Sierra Leoneans
4. The development of local businesses as subcontractors and secondary development
5. Improvement in the balance of payments for Government through foreign exchange earnings
6. Demonstrate internationally that Sierra Leone is a fertile place for international investment and provides opportunity for credible foreign companies to contribute and prosper I recognize that other unfounded criticisms in similar vein have been levied at the Agreement, from individuals and groups that are largely self-serving. I attach our rebuttal of one such "press release" in the hope that we set the record straight for our fellow citizens.

I trust that we would all continue to do our part in promoting our collective welfare, from positions of

honesty and the circumspection demanded of responsible leadership.

Sincerely,
________________________________

David F. Keili, P.E.
Managing Director
Cc: President of the Republic of Sierra Leone
Minister of Mineral Resources and Political Affairs
Minister of Finance and Economic Development


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