Government and Koidu Holdings reach new agreement
On the 13th December 2007, the negotiations between the government and Koidu Holdings commenced. According to the lead negotiator for the government, Frank Kargbo, he said the mandate of the negotiating committee was to look at ways and means to optimize benefits.
However, royalty fees have been increased from 5% to 6.5%, all special stones that are $5,000 and above automatically are tagged with 8% royalties with income tax now standing at 30%; withholding tax increased from 10 to 15%, dividend 10%, market expenses 2%, share profit 20%, valuation fee 0.5%, import duties 5% with fees for mining lease increased from $50,000 to $200,000.
Formally, a national gain stands at $202.6 million while the current gain now stands at $226.4 million. An estimated sum of $355.1 million in 17 years is expected to be the the projected global sum with $18 million a year.
The Minister of Mineral Resources, Alhaji Alpha Kanu noted that the previous government was able to raise $6 million from all minerals annually but with the current APC Government, $5.8 million was realized from licences in two years.
The Deputy Minister of Information and Communication, Sadiyata Sesay said the review of the mining agreement has once again put the government and the people of Sierra Leone on a dinner table with investors rather than picking the crumbs from the floor.
On her part, the Deputy Minister of Trade and Industry, Mabinty Daramy said her ministry’s mandate is to attract investors and encourage them to stay. She expressed the hope that the new agreement will enhance trade rather than create deficit.
The Chief Executive Officer of Koidu Holdings, Jun Jonbent, described the day as a significant moment, adding that the economic and social considerations of both parties were taken into account.
He further noted that the goal of the company is to satisfy the company’s shareholders who include the government and the host community, all in an effort to fulfill the country’s development aims and aspirations.
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