Environmental Impact Assessment Licence awarded to AML
African Minerals Limited, the iron ore project development company that is developing the Tonkolili project in Sierra Leone, West Africa, is pleased to announce that the Government of Sierra Leone has approved and the Parliament of Sierra Leone has unanimously ratified the Mining Lease (the “Mining Lease”) for the Tonkolili iron ore and related infrastructure projects (the “Projects”).
Parliament has also approved the fiscal regime and the Company’s proposed mine and logistics plans for the Projects.
Under the Mining Lease the Government has granted the Company two Large Scale Mining Licences, which are valid for a period of 25 years, following which they will be renewable for further 15 year periods in accordance with the Mines and Minerals Act 2009.
The Mining Lease also fixes the fiscal regime that will govern the development and operation of the Projects. Major features of the fiscal regime include:
- a Mining Lease fee of US$500,000 pa for each of the two Mining Licences;
- a 3% royalty of the gross sales price of iron ore production payable within 45 days of the end of each month of shipping;
- a corporate tax rate of 25% for the life of the mine;
- 5% withholding tax on dividends;
- 0.1% of gross sales of iron ore payable to a community development fund for the benefit of communities impacted by the Projects;
- 0.1% of gross sales of iron ore payable to an environmental and social protection and impact mitigation fund, to be managed and controlled by the Company;
- no withholding tax obligations on payments to contractors;
- GST exemption for the Company and its subsidiaries;
- no import taxes payable on materials consumed by the Projects;
The Government has also awarded an Environmental Impact Assessment Licence (“EIA Licence”) to the Company.
The EIA Licence has been awarded following the Government’s review of the Company’s environmental impact assessment statement. The EIA Licence is renewable annually on a rolling 12 month basis upon payment of the prescribed fees. Fees for the period 2010/2011 were USD 122,400.
Frank Timis, Executive Chairman, African Minerals
Commenting on the ratification of the Mining Lease, Frank Timis, Executive Chairman of African Minerals said:
“The unanimous ratification of the Tonkolili Mining Lease by the Parliament of Sierra Leone is a major milestone in the Company’s development. With this ratification and the granting of the EIA Licence, we are now able to move forward with development of the port, rail and mine site facilities required to support the Projects.”
“Tonkolili is a massive project that requires a very large capital investment to develop and optimise its world class resource. Fixing the Fiscal Regime allows African Minerals to develop Tonkolili with greater financial clarity”.
“Upon the finalisation of financing arrangements, we intend to move forward with a plan that will see approximately USD 1.75 billion of direct foreign investment into Sierra Leone over the next two years that will result in development of the Tonkolili Project to the point where it can produce 35 million tonnes per year of iron ore product between the first and second phases. In future years, we and our strategic partners plan to expand the Project further.”
“The Projects already provide direct employment opportunities for the people of Sierra Leone and, with our development plans approved, we look forward to the time when we will become a substantial tax payer in Sierra Leone and a major contributor to the Country’s redevelopment and improved standards of living.”
“We warmly thank His Excellency the President of the Republic of Sierra Leone, his Cabinet and the Members of Parliament for their support and we look forward to continuing our long-term relationship with the Government of Sierra Leone.”
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