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  • GDP, US$bn: 5.1
  • GDP per capita, US$: 688.0
  • Population, mn: 6.5
  • Inflation, CPI ave: 10.8
  • FX, LCY/US$: 4,817.9
  • Budget Balance, % of GDP: -4.6
  • Mining GVA, US$bn: 0.8
  • Mining Industry Value, US$bn: 1.5
Regulatory Risk Rating
39
0
100
Score: 39
Severe Risk
Sierra Leone's legal framework is very much a case of "one-step forward, two-steps back"; throughout the law we find examples of positive principles being subsequently undermined by pockets of government discretion or excessive government control over the industry. Whilst the country's troubled history may well explain a cautious and controlling approach and even justify to some extent a certain distrust of miners in Sierra Leone, a new era of mining (bringing with it the potential for positive change and increased revenue for the country) is unlikely to prosper under the current legislation.

Corruption Potential Index

Score: 25
Very High Corruption Potential

Corruption Risk Index

Score: 47
Moderate Corruption Risk

Regulatory Risk Rating

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Environmental Overview Commentary plus sign

SIERRA LEONE ENVIRONMENTAL REGULATIONS

GENERAL

Sierra Leone is an African country located on the west coast of the continent, bordered by Guinea to the north and east, Liberia to the south-east and the Atlantic Ocean to the south and west. Sierra Leone is 71,740 km², making it the 40th largest country of the 54 on the African continent. The country’s capital and largest city, Freetown, is located in the west of the country on the Atlantic coast and is home to the largest natural harbour in Africa.

Geographically, Sierra Leone is divided into four distinct regions. The eastern part of the country (home to many of the country’s diamond mines) is a mountainous region that gives way to plateaus and lowland plains in the interior. The western coastal region is primarily swamp, with Guinean mangroves stretching down Sierra Leone’s coastline. The southern and south-eastern region is primarily forest and farmland, with rainforest areas that cross over the Liberian border. Mount Bintumani in the east is the country’s highest elevation, standing at 1,948m. Sierra Leone also has many rivers, including the Rokel, Mano, and Moa.

Unsurprisingly due to the country’s location between the Equator and the Tropic of Cancer in the region known as the tropics, Sierra Leone has a tropical climate. However, the specific tropical climate – tropical monsoon and trade wind littoral climate, is, according to the Köppen Climate Classification System, relatively rare. This type of tropical climate is characterised by high temperatures with only minor fluctuations throughout the year, and high levels of rainfall. Sierra Leone’s dry season falls between November to May and the wet season occurs between May to October.

In terms of fauna, Sierra Leone is known to have more than 626 bird, 147 mammal, 99 fish, 67 reptile and 35 amphibian species (International Business Publications). Lions, hyenas, hippopotamus (including the endangered pygmy hippopotamus), manatees, buffaloes, chimpanzees, crocodiles (including the rare dwarf crocodile) and the emerald cuckoo are amongst the country’s wildlife (Encyclopaedia Britannica). Farming, logging and mining activities have impacted upon the country’s flora, though palm trees are still commonly found and there are believed to be almost 900 plant species in Sierra Leone’s rainforest. The country has established several national parks to protect and conserve its wildlife, including the Gola Rainforest National Park, the Kangari Hills Forest Reserve, the Outamba Kilimi National Park and the Tacugama Chimpanzee Sanctuary.

According to the WWF, deforestation, largely because of the cutting down of trees for furniture and fuel is a major environmental concern. Poaching and hunting of animals for bushmeat is also a problem. Loss of wildlife was especially prevalent during the civil war when state institutions were virtually non-existent.

PRINCIPAL LEGISLATION AND REGULATOR

The Environmental Protection Agency Act 2008 (EPAA) is the main legislation in Sierra Leone which regulates the protection of the environment and the environmental impact assessment (EIA) process. In terms of the mining industry, the EIA process is further regulated by the Environmental and Social Regulations for the Minerals Sector 2012 (ESRMS). The ESRMS is a lengthy and detailed document, which also provides additional regulations in respect of the closure of mining activities, environmental standards for mining activities and monitoring and inspection, amongst other issues.

The Environment Protection Agency (EPA) is responsible for regulating the EIA process and issuing environmental licences. The EPA is controlled and supervised by an appointed Board, which is collectively responsible for reviewing applications and granting environmental licences (s. 5(1), EPAA; see also s. 82(1), ESRMS). The Board is headed by an Executive Chairman/Director (Chairman) as appointed by the Board and approved by the Minister of Lands, Country Planning and the Environment (Minister). The Chairman is responsible for the day-to-day administration of the EPA, including the administration of the environmental licence application process and screening licence applications and is ultimately responsible for the granting of licences following approval of applications by the Board (s. 14, EPAA and s. 32 and 33, ESRMS).

EIA PROCESS

Applicants who confirm in writing that their reconnaissance operations will have no adverse effects on the environment, local communities or any monument or relic are exempt from applying for an environmental licence (s. 20(1), ESRMS). However, applicants for a reconnaissance licence who intend to erect camps and temporary buildings; take timber or water; construct weirs, dams or other impoundments; intend to use intrusive methods to collect geological information or whose operations are likely to cause disturbances to local communities must apply for a licence (s. 21, ESRMS).

In terms of the EPAA any person who wishes to undertake an extractive industry project in Sierra Leone, which includes mining and quarrying, must undertake an EIA and apply for a licence (s. 24(1) read with the First Schedule, EPA). An applicant who wishes to undertake any project or activities set out in the First Schedule of the EPAA, including exploration, small-scale mining and large-scale mining, must submit a project screening application to the Chairman or its authorised officer to request a determination of the project category for environmental and social assessment (s. 24(1), ESRMS). Project screening applications must contain the following information: the area of the intended project and information on its current uses and physical, biological and social environment; on the nature of the project, the intended work plan and the anticipated implications on the environment and social conditions; and the information specified in s. 133(1) of the MMA, which includes information on environmental baseline assessment work, likely major environmental and social impacts, impact minimisation and mitigation measures, timetables for implementation, the budget to achieve environmental objectives and an environmental management programme (see s. 113(1), MMA) (s. 24(4), ESRMS). Within 14 days of receiving application for screening, the Chairman or its authorised officer will assign the project one of four categories (A, B, C or D) based on the environmental and social impact screening criteria contained in the Third Schedule to the ESRMS (s. 24(6), ESRMS).

Projects will be categorised based on the scale and nature of environmental and social impacts. Category A projects will produce significant adverse environmental and social impacts that are likely to result in the need for resettlement; Category B projects will produce significant adverse environmental impacts with moderate social effects not involving the need for resettlement; Category C projects will have moderated environmental and/or social impacts which negative effects can be eliminated or minimised by simple and easy to implement measures; and Category D projects do not involve significant environmental and/or social impacts (s. 25(3), ESRMS). An applicant may appeal to the Board for the reconsideration of the category determined by the Chairman on payment of an additional fee to cover the administrative expenses of the appeal (s. 26(1), ESRMS).

Depending on the classification of a project, different environmental and social assessment and management instruments will be required as summarised below (s. 25(c) and (d) and 25(3), ESRMS):

  • Category A: requires an EIA and social impact assessment (SIA); a mine closure plan (MCP); an environmental management plan (EMP); a social management plan (SMP); a Community Development Agreement (CDA); and a resettlement management plan (RMP). Furthermore, a scoping report identifying the content and extent of the environmental information to be included in the environmental and social impact statement must be submitted to the Chairman or authorised officer (s. 27, ESRMS). The scoping report must be prepared in accordance with the Fourth Schedule of the ESRMS.

 

  • Category B: requires an EIA, SIA, MCP, EMP, SMP and CDA (where required based on the terms of the MMA). Category B projects also require a scoping report (s. 27, ESRMS).

 

  • Category C: requires an environmental and social impact assessment (ESIA); simplified MCP; and a combined EMP and SMP.

 

  • Category D: requires compliance with the code of practice and a disclosure and declaration signed under oath that there will be no adverse environmental, social or local economic impacts arising from the operations (see the Eighth Schedule, ESRMS).

 

The contents of the different instruments are detailed in the ESRMS. Below is a summary:

  • EIA: consists of an EIA study and EIA report that focuses on environmental issues and describes the impacts that the proposed project is predicted to have on biophysical conditions if implemented, together with the proposal for avoiding, mitigating or compensating adverse effects (s. 28(1)(a), ESRMS). An EIA must contain the following information the location of the project; the purpose of the project; the direct and indirect the project will have on the environment; the social, economic and cultural effects the project will have on people and society; the communities, interested parties and government ministries consulted; proposed mitigation measures; alternatives to the project; natural resources to be used; decommissioning plans and such other information as may be necessary for a proper review of the potential environmental impact of the project (s. 26(2), EPAA; see also Third Schedule, EPAA). The Fifth Schedule of the ESRMS provides generic terms of reference to assist applicants with the preparation of EIAs.

 

  • SIA: consists of a SIA study and SIA report which describe the full range of social, economic and health issues affecting host communities, predicts significant adverse social impacts and sets out proposals for avoiding, mitigating or compensating for adverse effects (s. 28(1)(b), ESRMS). The Sixth Schedule of the ESRMS provides guidance and requirements on the content of SIAs.

 

  • ESIA: consists of a report containing a simplified or limited EIA which incorporates sections on social impacts and health impacts and is appropriate for projects that require more limited environmental and social analysis than an EIA as negative effects on the environment and the community can be eliminated or minimised by simple and easy to implement measures (s. 28(1)(c), ESRMS). The Seventh Schedule of the ESRMS provides guidance and requirements on the content of ESIAs.

 

  • MCP: consists of proposals for managing the progressive restoration of worked-out mine areas and the ultimate closure and restoration or rehabilitation of the mine site upon cessation of work (s. 29(1)(a), ESRMS). The Ninth Schedule of the ESRMS provides guidance and requirements on the content of MCPs.

 

  • EMP: EMPs must describe how the applicant will implement all recommendations, commitments and obligations designed to avoid, minimise, ameliorate or compensate for adverse environmental impacts identified in the relevant environmental assessment instrument (s. 29(b), ERMS). The Tenth Schedule of the ESRMS provides guidance and requirements on the content of EMPs.

 

  • SMP: SMPs describe how the applicant will implement all recommendations, commitments and obligations to avoid, minimise, ameliorate or compensate for adverse social impacts identified in the relevant social assessment instrument (s. 29(c)(i), ESRMS). SMPs must include a community consultation and participation plan and a grievance management plan pursuant to s. 138, 139 and 140(f) of the MMA (s. 29(c)(ii), ERMS). If the project meets the relevant thresholds, SMPs must include a CDA pursuant to section 140 of the MMA and the applicant for an environmental licence must include the details of the planned CDA as specified in the Twelfth Schedule of the ESRMS (s. 29(c)(iii). If the project will result in the resettlement of local communities, SMPs must include a RMP for the purposes of section 38(3) of the MMA.

 

Applicants must complete and submit to the Chairman or authorised officer of EPA, an application form in terms of the Fifteenth Schedule to the ESRMS and a confirmation of local community participation in sustainable development in terms of the Fourteenth Schedule to the ESRMS (s. 32(1)(a) and (b), ESRMS). The Board may prescribe fees for licences (s. 33, EPAA as amended by s. 1(k), EPAA (Amendment) 2010).

The Chairman or authorised officer will examine the application and confirm in writing within 14 days whether the required type and number of documents have been submitted relative to the project category (s. 33(1), ESRMS). In the case of Category A and B projects, the Board will review the EIA and SIA and accompanying management instruments and approve or reject them within a period of 12 weeks from the date of submission; the Board may extend this period if it requires clarifications from the applicant (s. 33(2), ESRMS). The Board will only grant an environmental licence in relation to Category A and B projects when it is satisfied that the appropriate screening and review of the relevant application details and environmental and social management instruments have been conducted and that any significant adverse environmental impacts and social impacts can be mitigated or ameliorated sufficiently to allow for sustainable development under the relevant legislation (s. 33(4), ESRMS). In the case of Category C projects, the Board will review the ESIA and approve or reject it within a period of six weeks from the date of submission (s. 33(3), ESRMS). For applications for Category C projects involving minor environmental and social issues, the Board will determine the environmental licence by giving due weight to both the environmental and social considerations as set out in the ESIA (s. 33(5), ESRMS).

Any person aggrieved by a decision may appeal the decision to the High Court within 30 days of such decision (s. 32, EPAA).

An environmental licence will be valid for such period as the Board may determine (s. 84(1), ESRMS). At the expiration of the environmental licence, the licence may be renewed by the Board upon application by the holder, for such period as determined by the Board (s. 84(2), ESRMS). An environmental licence authorises the holder to initiate or continue with the application for a mining right or permit (s. 83(1), ESRMS).

Pursuant to section 136(2) of the MMA, the Director of Mines shall require all small-scale and large-scale mining licence holders to provide financial assurances for their own performance against all obligations to which it is subject to pursuant to an EMP or the terms of an environmental licence (s. 95(1), ESRMS).

There is a mandatory obligation on all applicants for an environmental licence to carry out consultation with stakeholders from the earliest stages of a mining project and continue consultation throughout the mining operations until closure is completed (s. 15 and First Schedule, ESRMS).

Licences issued in terms of the EPAA are not transferable (s. 35(1), EPAA). Notwithstanding s. 35(1) of the EPAA, in the event of a transfer of a mineral right, the acquirer will implement the EIA or ESIA, as applicable, and the MCP approved by the Board in relation to the mineral right (s. 94(1), ESRMS). Where there is a change in ownership, control or management of the licence holder, the previous owner and new owner must notify the Director of the transfer within 14 days of the change (s. 35(4), EPAA).

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Mining Overview Commentary plus sign

SIERRA LEONE MINING REGULATIONS

GENERAL

Sierra Leone, officially the Republic of Sierra Leone, is located in West Africa, bordered by Guinea to the north and east, Liberia to the south-east and the Atlantic Ocean to the south and west. According to the World Bank, Sierra Leone has a population of over 7.3 million, with an average life expectancy of just 51 years – one of the lowest averages in the world. In 2016, Sierra Leone’s GDP was $3.669 billion (USD) (World Bank), making the country one of the poorest in the world. Sierra Leone is still recovering from the after effects of the civil war which lasted between 1991 and 2002 and, according to the UNDP, resulted in approximately 70,000 casualties and 2.6 million displaced people, though accurate statistics remain unknown. It is widely believed that the country’s mineral resources – in particular its diamonds – were a key motivation for the Revolutionary United Front and its backers.

Today, agriculture dominates Sierra Leone’s economy, accounting for approximately 70% of the GDP and employing approximately 61.1% of the population (World Bank). Since the end of the civil war, mineral exports have also been a major driver of the country’s economy, though economic growth has been greatly impacted by the fall in global commodity prices, particularly iron ore. In 2013, mineral exports were responsible for 93.8% of export revenues but by the end of 2014 this figure had reduced to 76.9% (USGS). Whilst the mining sector is a major contributor to GDP it employs just 1.4% of the population (World Bank). Sierra Leone is a world top ten producer of diamond and rutile (USGS), which along with iron ore are the main mineral exports. The country also has significant deposits of bauxite, gold, ilmenite and zirconium (USGS).

Sierra Leone was hit by the Ebola outbreak in 2014, which resulted in around 4000 deaths and, together with the fall in commodity prices, resulted in the economy contracting by 21.1% in 2015 (OECD). Since then economic growth has returned (4.3% in 2016 (OECD)) though continued growth will depend largely on rises in commodity prices – highlighting the need for diversification in the country’s economy. Illegal diamond mining continues to be a major problem, though international measures such as the Kimberley Process have had some impact.

In 2016, Sierra Leone was ranked 80th in the Fraser Institute’s Policy Perceptions Index of 104 jurisdictions. According to Transparency International’s Corruption Perception Index 2016, Sierra Leone is ranked 123rd out of 176 countries.

PRINCIPAL LEGISLATION AND REGULATOR

The principal legislation in Sierra Leone in relation to the mining industry is the Mines and Minerals Act 2009 (MMA), which regulates the licensing process for mineral activities in the country. Other relevant legislation includes the Environment Protection Agency Act 2008 (EPAA) and its accompanying regulations; the National Minerals Agency Act 2012 (NMAA), the Income Tax Act 2000 (ICA) and the Finance Act 2016. In addition, the Mines and Minerals Operational Regulation 2012 (MMOR) has specific requirements for surface, underground and open-pit mining operations and regulates mineral reporting standards, health and safety standards, the use of explosives and waste disposal.

In 2012 the National Minerals Agency (NMA) was established under the terms of the NMAA. The NMA, which is described as a semi-autonomous government agency, took over responsibility for the administration and regulation of the mining sector from the Ministry of Mines and Mineral Resources (Ministry) - though the Ministry remains the responsible authority for policy making in the sector. Under the terms of the MMA the Minister of Mines and Mineral Resources (Minister) is ultimately responsible for decisions relating to mineral rights; it is unclear if some of these duties are now carried out by the NMA, though the NMAA does not amend the MMA in this respect. The Minister is supported by the Director of Mines (Director), who heads the Directorate of Mines within the NMA; the Director is responsible for various inspections and ensuring that the terms of the MMA are being complied with (s. 6(1), MMA; see also s. 14(3), NMAA). The MMA also established the Minerals Advisory Board (MAB), which is composed of at least 15 people each representing various different organisation, communities and government agencies (see s. 11(2), MMA). The MAB has a variety of responsibilities including advising and making recommendations to the Minister in relation to granting, renewing, transferring and cancelling licences and certifying mineral rights applications (s. 12, MMA). Other relevant departments within the NMA include: the Mining Cadastre Office (MCO), which is responsible for managing mineral rights applications and maintaining a cadastral survey map of mineral rights (s. 40, MMA); the NMA Board which oversees the efficient operation of the NMA (s. 3(2), NMAA); the Department of Geological Survey which is responsible for facilitating and monitoring exploration and managing national geological information (s. 12(2)(b), NMAA); and the Department of Precious Minerals Trading which is responsible for administering precious minerals trading licences and certifying exports (s. 12(2), NMAA).

Under the terms of the MMA, ownership and control of all minerals in Sierra Leone and its continental shelf are vested in the Republic of Sierra Leone (s. 2(1), MMA).

GRANTS AND FORMS OF MINERAL TITLE

Mineral rights in Sierra Leone shall only be granted to: individuals over the age of 18 who are either citizens of Sierra Leone or have been resident in Sierra Leone for a period of 10 years immediately preceding the application and are not otherwise prohibited from obtaining rights under the MMA; co-operative societies registered in accordance with Sierra Leone laws; and body corporates incorporated and registered in accordance with Sierra Leone laws which are not otherwise prohibited from obtaining rights under the MMA (ss. 26 & 69, MMA). Rights shall be granted on application, except in designated areas where minerals have been discovered by the government in which case rights may only be granted by public tender (ss. 25 & 27, MMA).

All applications for mineral rights are submitted to the MCO and must be accompanied by a non-refundable fee ($250 (USD) for reconnaissance and exploration licences and $2,500 (USD) for large-scale mining licences (Aug. 2017)). Applications shall be forwarded to the MAB which will ensure that the requirements of the MMA have been met before the application is recorded and certified to the Minister. Ultimately the grant of all mineral rights is at the Minister’s discretion. Where the Minister refuses to grant an application the applicant must be provided with reasons for the refusal and be given the opportunity to amend the application. A decision of the Minister to refuse an application for a mineral right can be appealed in court.

All mineral rights may be granted subject to terms and conditions issued by the Minister. Each right shall specify the specific term for which it is granted and the area to which the right relates, subject to the maximum durations and areas specified in the MMA.

The MMA provides for the following mineral rights:

  • Reconnaissance Licence: grants the holder the right to conduct non-exclusive and non-evasive reconnaissance operations in the designated area (ss. 1 and 64(1), MMA). The application must include: a statement of the technical and financial resources available to the applicant; details of any significant adverse effects the reconnaissance operations would be likely to have on the environment; and a statement of the applicant’s proposal regarding the employment of Sierra Leone citizens (s. 57, MMA). If the Minister grants the application, the applicant must notify the Minister of their willingness to accept the proposed licence within 30 days (s. 60(2), MMA). Reconnaissance licences shall be granted for a period not exceeding one year for an area no greater than 10,000 km² (s. 61(1), MMA). Activities under the licence must commence within 90 days of issuance (s. 65(1)(a), MMA). Holders are obligated to meet the requirements under section 65, MMA. Reconnaissance licences are renewable once for a period of up to one year subject to Ministerial approval (s. 63(6), MMA). Applications for renewal must be made 90 days prior to the expiry of the existing term and must be accompanied by a report of reconnaissance operations carried out so far, a proposed programme of future reconnaissance operations and a description of any alterations from the existing licence, amongst other information (s. 63(3), MMA).

 

  • Exploration Licence: grants the holder the exclusive right to carry out approved exploration operations in the designated area (s. 77(1), MMA). The application for an Exploration Licence must contain a variety of documentation, including: company information with details of all shareholders having beneficial ownership of 5% or more of the issued share capital; company history of exploration operations in Sierra Leone; the name and qualifications of the person responsible for supervising the exploration programme; a planned exploration programme; a statement of the technical and financial resources available to the applicant; details of any adverse environmental effects; and a statement on proposals relating to the employment and training of Sierra Leone citizens (s. 70, MMA). If the Minister grants the application, the applicant must notify the Minister of their willingness to accept the proposed licence within 30 days (s. 72(2), MMA). Exploration licences shall be granted for a period not exceeding four years for an area no greater than 250 km2 (ss. 75-76, MMA). Approval of the programme of exploration operations must also be obtained and minimum expenditure obligations will be provided as part of the terms and conditions of the licence (s. 74(2), MMA). Exploration must commence within 90 days of issuance and the licence holder must meet the obligations specified under section 78, MMA. Licences are renewable twice, with the first renewal for a period no greater than three years and the second renewal for a period no greater than two years (ss. 76(6) & 76(11), MMA). Applications for renewal must be submitted at least 90 days prior to the expiry of the existing licence and contain the information specified under section 76(3), MMA (see s. 76(2) & (7), MMA). The application for the second renewal must also contain information on feasibility studies and environmental impact assessments to be carried out during the term of renewal and provide evidence that a mineral discovery has been made that may be of commercial value (s. 76(8), MMA; see also s. 76(10), MMA). The area for renewal shall be no greater than 125 km2, unless the Minister permits otherwise (s. 76(2) & (8)(a)(iii), MMA).

 

  • Large-scale Mining Licence: The holder of an Exploration Licence shall have the exclusive right to apply for a Mining Licence over the exploration licence area (s. 79(1), MMA). An application for a large-scale Mining Licence (i.e. mining involving mechanised operations or underground openings exceeding 20m in depth (s.1, MMA)) must contain (amongst other things): the name and qualifications of the person responsible for supervising the programme of mining operations; the period for which the right is sought; a statement of the mineral deposits, including estimated reserves; a proposed programme of mining operations, including information on profitability, reclamation and rehabilitation measures, and environmental and social impacts; a detailed statement on forecast capital investment, operating costs, revenues and financing; information on consultations with interested and affected parties and the results thereof; proposals for the procurement of local goods and services and the employment and training of citizens; a report on marketing arrangements for the sale of mineral production; and an EIA licence (where required) (see s. 106(2), MMA). The Mining Licence shall not be granted unless the terms of section 108(3) are met, which includes that the applicant have adequate financial resources, technical competence and experience to carry out effective mining operations. The Minister shall not refuse a licence on the basis of such terms without first allowing the applicant to address the grounds for refusal (s. 108(4), MMA). If the Minister grants the licence the applicant shall have 60 days within which to accept the licence before the application lapses (s. 109(2), MMA). Mining licences shall be granted for a period not exceeding 25 years or the estimated life of the ore body, which ever is shorter (s. 110, MMA). Various additional documentation must be approved and appended to the licence (s. 111, MMA). Mining activities must commence within 180 days of registration of the licence and the licence holder must meet the obligations specified under section 115, MMA. The licence may be renewed for periods not exceeding 15 years (s. 112(2)(a), MMA). The application for renewal shall be accompanied by a statement providing details on: ore reserves, capital investment and forecasted costs and revenues; mining operations (if substantially different from the previous period); and social and environmental impacts and mitigation measures (s. 112(2), MMA). The Minister may renew the licence with or without variation of the conditions (s. 112(4), MMA).

 

Reconnaissance licences are not transferable (s. 68, MMA). Exploration and mining licences may be transferred with the prior approval of the Minister. Transfers may be subject to certain terms and conditions.  

Other licences and permits issued in terms of the MMA include artisanal mining licences; small-scale mining licences (for mines that do not exceed the thresholds for large-scale mining licences); permits to explore for, mine, export or import any radioactive mineral; and dredging permits (see Parts 10-14, MMA).

DEVELOPMENT CONSIDERATIONS

Exploration and mining programmes must be submitted as part of the application for mining rights and must be approved by the Director (ss. 70(g) & 106(2)(i), MMA). Programmes will form part of the terms and conditions of the licence and minimum expenditure requirements will be given (ss. 74(2) & 110(2), MMA). Any amendments to the mineral programmes must be approved by the Director in the case of exploration, or the Minister in the case of mining (ss. 82 & 113, MMA).

Applications for mineral rights, including exploration, must contain proposals for the employment and training of Sierra Leone citizens (s. 70(k) & 106(n), MMA). Mineral rights holders are required to give preference to materials and products made in Sierra Leone and service agencies located in Sierra Leone which are owned by citizens, incorporated in Sierra Leone or public corporations (s. 163, MMA). Preference for employment must be given to citizens with the necessary skills and qualifications and training and employment schemes must be carried out by mining licence holders (s. 164, MMA).

A Community Development Agreement (CDA) with the primary host community shall be required where the operation exceeds certain limits and must be agreed and approved prior to the commencement of mining operations (s. 139(1), MMA; see also s. 141). The ‘primary host community’ is to be agreed between the licence holder and the local council; where there is no community of persons within 30km the primary host community shall be the local council (s. 139(2)-(3), MMA). Licence holders must spend no less than 1% of 1% of the gross revenue earned by the mining operations in the previous year to implement the CDA and provide the Minister with annual reports on expenditure (s. 139(4), MMA). The CDA must cover the extensive and broad criteria listed under section 140, MMA. The Minister must approve the CDA and if the terms cannot be agreed, the Minister shall make a decision on the CDA in consultation with the local council (s. 141, MMA).

The MMA requires an environmental impact assessment form part of the application for a large-scale Mining Licence (s. 131(2), MMA). Environmental requirements may also apply to exploration activities, though a simplified process will operate. Clear requirements are given under the Environmental and Social Regulations for the Mineral Sector (ESRMS), which were issued in 2012 to provide industry specific processes. Environmental licences shall be granted by the Board of Directors of the Environmental Protection Agency. Licences shall be refused where the environmental and social impacts are so great they are incapable of being avoided, mitigated or compensated for (s. 36(8)(c), ESRMS). Decisions on environmental licences may be appealed to the High Court within 30 days of notification.

Holders of large-scale mining licences must also reach an agreement with the owner or lawful occupier of the land to obtain a land lease or other rights to use the land. The agreement shall include details of surface rent (distributed in accordance with s. 34A, MMA), as well as the duration of the lease or right and the area to which it relates (s. 34, MMA). Where agreement cannot be reached it shall be determined by the Minister on the advice of the MAB. Compensation may be demanded by the owner or lawful occupier of the land and shall be based upon damages / market value of the land without reference to any enhanced value due to the presence of minerals (s. 35(1)-(3), MMA). The demand for compensation shall not entitle the owner or lawful occupier of the land to prevent or hinder the exercise of rights under a mineral right (s. 35(5), MMA). Where the mineral rights holder fails to pay compensation or the amount is unsatisfactory, the Minister may determine compensation on advice of the MAB (s. 35(6), MMA). The Minister may also compulsorily acquire private land or rights over private land for use by the holder of large-scale Mining Licence providing the Minister is satisfied that the licence holder has taken all reasonable steps to reach an agreement with the relevant parties (s. 36, MMA). In cases of compulsory acquisition compensation shall be paid on the same terms as stated above (s. 37, MMA). Owners or lawful occupiers shall also have the option to be compensated by resettlement; costs for resettlement shall be borne by the licence holder on the basis of an agreement with the relevant parties or a determination of the Minister (s. 38, MMA).

Holders of large-scale mining licences must pay an annual fee, currently set at $500,000 USD (Aug. 2017). The government has an option to acquire, on such terms as may be agreed between the relevant parties, a shareholding interest in any large-scale mining project (s. 162, MMA). Other royalty rates are clearly prescribed.

Terminations, suspensions and reductions in production must be notified to the Minister for approval (s. 118, MMA). Approval may be given subject to certain terms and conditions, including a date of resumption of production (s. 118(4), MMA). The MMA also contains extensive reporting requirements – with quarterly, semi-annually and annually reports on various matters required throughout the exploration and mining stages.

 

ENVIRONMENTAL REGULATIONS

See ‘Environmental Overview Commentary’.

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