March 14, 2011 / 4:33 PM / in 9 years

INTERVIEW-UPDATE 1-Sierra Leone seeks to improve mining deals

* Koroma confident of getting better deals

* Companies have denied contracts are unfair to country

By Simon Akam

FREETOWN, March 14 (Reuters) - Sierra Leone needs to revise recent large-scale mining leases to get a better deal for its people, President Ernest Bai Koroma told Reuters on Monday.

“There is a need for us to improve on the agreements that were signed,” he told Reuters in an interview at his office in the capital Freetown.

“All of the agreements, including African Minerals’,” he added of the British company handling one of two large-scale iron extraction projects there. The other is London Mining’s redevelopment of an abandoned mine.

African Minerals says the Tonkolili project is the world’s largest deposit of magnetite, a type of iron ore, with 12.8 billion tonnes.

Both the African Minerals and London Mining agreements included substantial tax and other concessions out of line with previous legislation and the provisions of a new mining act.

That act, which was drawn up with donor support, was intended to produce a more equitable environment for the exploitation of Sierra Leone’s abundant mineral resources.

“When we took over government we committed ourselves to ensuring the benefits of the minerals sector were enjoyed by the people of this country,” said Koroma, adding he was confident of being able to alter the deals to the state’s advantage.

“That is why we are negotiating; otherwise there would be no purpose of renegotiating,” he said.

In statements made to Reuters late last year, both companies denied any unfair preferential treatment. London Mining said the incentives included in the deal reflected the fact that Sierra Leone is still considered as having a high investment risk.

Besides the notorious diamonds that fuelled the bloody civil war in the 1990s, Sierra Leone has iron ore, bauxite, rutile and oil, following a recent offshore find.

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