Government officials in West Africa’s Mano River Union, consisting of Sierra Leone, Guinea, Liberia and Ivory Coast, are holding discussions to harmonize mining codes and laws relating to tariffs and taxes at the regional level in a move to protect investors in the mining industry, Sierra Leone’s mining minister said Wednesday.
The cooperation aims to ensure "disparity and imbalance won’t arise," Minister Minkailu Mansaray told Dow Jones Newswires on the sidelines of the West Africa Mining Investment Summit in London. Recent changes in Guinea’s mining investments code may have led to imbalances, according to the minister.
West Africa is rich in mineral resources including iron ore, bauxite, gold and manganese, which the region is seeking to develop with international investors to boost local development and reduce poverty. However, political and tax changes, together with the high costs of developing infrastructure such as ports and railroads—which may involve bilateral cooperation—have thwarted some investment.
"Sierra Leone’s issue of concern is the need to protect the investor and to create an environment where government and people should participate in a dialogue on creation of mine projects," Mr. Mansaray said. "We believe we need some changes."
A spokeswoman for Guinea’s mining ministry had no immediate comment on the talks. The development of Guinea’s massive Simandou iron ore deposit, where investors include Rio Tinto PLC (>> Rio Tinto plc), Vale SA (>> Vale SA) and BSG Resources, has been slowed by infrastructure hurdles, partly because the most efficient shipping route to the export market could be through neighboring Liberia, which would involve international cooperation and the rehabilitation of existing railroads.
Amadou Baba, the mining minister of Mali, told Dow Jones he expects that West Africa would become an important iron ore producer "within five to 10 years. The problems are more infrastructure, railways and power supplies than politics," he said on the sidelines of the summit.
Sierra Leone is also developing a National Minerals Agency to act as an industry regulator and directly support the country’s poverty reduction strategies, the new agency’s director general Sahr Wonday said at the event. The plan to is ensure mining contributes $1.5 billion to the country’s targeted annual gross domestic product of $5.8 billion by 2015, he said.
The agency will "ensure all diamond trade is in accordance with the Kimberley Process, will introduce a precious minerals trading act this year and will cooperate with the Ministry of Trade to implement Sierra Leone’s local content legislation and policy..... to give preference to (use of) materials and products made in Sierra Leone," Mr. Wonday said.
Sierra Leone’s royalties on the sale of mine products are set to remain unchanged at 5% for precious metals, 6.5% for diamonds and 3% for other minerals including iron ore, he said.
London Mining PLC (>> Lonrho plc) is currently ramping up an iron ore mine in Sierra Leone and Amara Mining PLC (>> AMARA MINING PLC) is planning to start a gold project in the western African nation, the Sierra Leone minister said.
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