Following the recent outbreak of the Ebola Virus Disease in Sierra Leone which has crippled the country’s economy and badly affected the Extractive Industries, the Ernest Bai Koroma University in partnership with the Extractive Transparency and Accountability Group (ETAG) extended an invitation to the Management of AMR Gold Exploration Company to deliver a public lecture on the topic: “Impact of the Ebola Virus Disease on the Extractive Industries in Sierra Leone”.
The lecture took place at the University Auditorium where over three hundred students from various departments assembled. The event was sponsored by the United Nations Development Program (UNDP), GIZ and IBIS International.
See detailed speech below:
10th June 2015 @ Ernest Bai Koroma University of Science and Technology, Makeni City, Bombali District, Northern Sierra Leone.
By Sannoh Elkass- Media and Communications Specialist-AMR Gold
Students from this noble institutions
Ladies and gentlemen I salute you all.
Mr. Chairman, permit me to use this God giving opportunity on behalf of the Board of Directors, Management and Staff of AMR Gold to thank the organizers of this all important event.
As a company, AMR Gold was granted three Exploration Licenses and started operations in July 2011 in Sella Limba and Sanda Loko Chiefdoms.
To date, AMR Gold has carried out detailed exploration and evaluation programmes on its Exploration Licences which has the potential for multiple mineral commodities such as Gold, Coltan, Tin, Diamond and Rare Earth elements.
The Company has so far identified three small scale mining licences as potential precursors to a larger bedrock project which will lead to the development of a mine operated to the highest international health safety and environmental standards, whilst we address the socio-economic aspirations of our operational communities and the country at large.
As a way to kick-start my submission, let me use this medium to state here that the Extractive Industries is a very cumbersome sector and Part 4 Section 23 (1) of the Mines and Mineral Act of 2009 laid emphasis on its categorization. In this regard, I am primarily focusing on the mining sector due to the huge contributions being made by the mining sector to boost the country’s economy.
Like the decade civil war which left untold sorrow to all Sierra Leoneans, the Ebola Virus has not only claimed the lives of over two thousand Sierra Leoneans but it has crippled our economy, an economy that was described by the World Bank Doing Business Survey as the fastest growing economy in the Sub Saharan Africa. It is therefore important to state here that the deadly Ebola outbreak, according to the United Nations Economic and Social Council, has drained around $3 billion from Sub-Saharan African economy and had already begun to erode economic growth which could certainly endanger sustainable development. While Ebola is primarily a health issue, the Ebola virus has adversely affected every developmental sector particularly the Extractive industries.
Before now, you will agree with me that the Extractive Industries have been the largest contributing sector to the Sierra Leone economy with about 42% to the national GDP. Indirect taxes are the largest contributor to government revenue, while corporate income tax, lease, licenses and royalties constitute less than half of the total revenue. In essence, it is evidently clear that royalties are potentially the biggest source of government revenue from the mining companies.
Let me at this juncture disclose here that before a company engages in exploration and or mining, that company by law needs to hold a mineral right, for which a substantial fee is paid to the government. The fees paid on licenses/leases contribute about 5million United States Dollars to the national coffers. Royalties are charged by the percentages on the market values of minerals. Therefore, it is unequivocal to evince that the mining sector of Sierra Leone has been a critical player in our economic growth, manifesting a symbiotic and amiable ambience just before the advent of the deadly Ebola which has nearly made the country to slip off the investment radar since last May, 2014. This scourge has not only slowed down the mining operations in the country, but has concomitantly created a spiral negative effect in the entire industry of mining ranging from small scale to large scale operations in all spheres..
According to the (UNDP) United Nations Development Programme 2014 Reports, “On the Socio–Economic impact of the Ebola Virus in the three most affected countries”, one of the critical issues highlighted, is the issues of reduced investment incentive and colossal death rate which had and still continuing to have direct consequences on the industry.
This is because most of the people that fell prey to this virus, fall within the energetic young labor force that forms part of the potential employees the extractive industry hugely relied on. Sadly, this myriad death toll affected some of the result-oriented employees who had over the years accrued inundated technical skills that will add value to the industry.
Besides, at the peak of the virus in the country, the psychological trauma that gripped the entire country cannot also be unconnected to the low operational output that became apparent in the extractive industry as our workers were encumbered with gloomy state of dilemma and perpetual fear.
Mr. Chairman, permit me to state here that the industry’s output capacity has been brought down to an unprecedented scale, thus a direct bearing on the tax contribution potential in the country’s economy, in effect, major mineral export has also been brought to its knees. This has also badly affected foreign direct investment growth.
Inherently, this categorization of the Ebola impact on the mining sector in the country, cannot be in any way exhaustive, rather, we will only attempt to pin point critical issues that can be easily grasp for onwards investigation.
Today, the Ebola outbreak has impacted negatively on the extractive industries especially in the three affected countries. For instance, internationally recognized firms Rio Tinto and Vale, as well as Africa Minerals, Sierra Rutile and London Mining, have all been forced to either close or reduce their staff capacity. The world’s biggest iron ore producer, Vale, which was involved in the Simandou project in Guinea until late April, 2014 was reported to have evacuated its international members of staff and put the rest of its workforce on leave. Africa Minerals, the country’s largest employer in the extractive sector, shut-down and over five thousand employees are now unemployed. London Mining which was later bought by Frank Timis has also closed-down by relieving over two thousand employees. These active employees who have been laid-off due to the negative impact of the Ebola virus have now been added to the unemployment rate with an exponential increase.
Among other things, Dawnus mining contractor also laid off about three thousand (3000) Sierra Leonean staff as a result of the negative impact of the Ebola virus. As a consequence, their contributions to the revenue bread basket had declined at an alarming rate.
INTERVENTION FROM THE EXTRACTIVE INDUSTRIES
Despite this negative impact, it is equally important to note that before the collaborative efforts of the International partners, the mining companies are on record to be the first contributors as soon as the Ebola virus was discovered. The sector made significant financial and other material donations as a prompt response to contain the spread of the virus. The mining companies alone contributed over one billion Leones to the Ministry of Health and Sanitation to help in containing the spread of the virus.
AMR Gold, in addition to the donations increased our support to Sella Limba and Sanda Loko communities, by providing two hundred infrared Thermometers to different villages, provided PPEs, one hundred and fifty Veronica buckets and gallons of chlorine. We provided food stuffs to quarantine homes and financial assistant to affected victims and families. We finally engaged in awareness raising campaigns and gave stipends to youths who were manning some check points along the road from Bankabi to Kamakwie. Apart from the aforesaid support, we are the only foreign-based company with 99% Sierra Leonean staff from Senior Management to Junior Staff level.
As I conclude, since many gains have been made to combat the EVD, Let me suggest here that the GoSL Should:
- Ensure good and transparent governance of revenues from the mining sector so it can transcend into the development of the lives of the poor Sierra Leoneans. Part of this can be achieved if we give institutional support to the EITI initiative.
- I am finally appealing to the University Administration to incorporate courses having direct relationship with Resource Governance and the Extractive Industries in general. This will be the surest way to develop trained and qualified Sierra Leoneans to man/supervise the Extractive Industries for sustainable development.
Thank you all.