By KABS KANU
It is going to be grim for over 4, 000 mine workers and their families in Sierra Leone, as the SIERRA RUTILE MINING COMPANY ceases operations .
With inflation , soaring food and commodity prices and extreme hardship looming after President Maada Bio signed the 2024 Finance Act, which has levied taxes on some basic services, the suspension of operations by Sierra Rutile is about to throw another 4, 000 people in the already bleak and gloomy unemployment market after it turned off machines and work.
According to sources connected with the management, Sierra Rutile , which was bought in 2016 by the Australian company, ILLUKA, today suspends trade on the Australian Stock Exchange ( ASX ) because the Sierra Leone People’s Party ( SLPP ) President Maada Bio government failed to keep government’s side of the bargain on the contract it signed in 2021 with Sierra Rutile and approved by the Sierra Leone Parliament under the Third Ammendment Sierra Rutile Act, which, among other things, gave the mining company limited tax concessions to facilitate their retention of Sierra Leonean staff.
However, in what the Sierra Rutile Company may regard as bad faith by the Sierra Leone Government, the Company received a letter from the Ministry of Finance asking the company to pay all taxes to the government. The SLPP Government based its demand on the rise in the world market of the price of rutile.
READ COMMENTARY BY ANDREW KAMARA
*_Sierra Rutile Limited Nears Closure Amid Regulatory Challenges and Waning Investor Confidence Under the Bio Regime_*
*By: Andrew Kamara
*_Wednesday 24th January,*_
*_2024._*
*Sierra Rutile Limited, an integral player in Sierra Leone’s mining sector with a storied history of over 50 years, is on the brink of closure, signaling a significant blow to the nation’s economy. The impending shutdown is attributed to a combination of factors, including a lack of investment confidence and stringent regulatory challenges imposed by the current Bio regime, coupled with onerous taxation policies.*
*Founded officially in December 1971 by Nord Resources and Armco Steel, Sierra Rutile’s mining operations had already commenced in 1967, marking its early contribution to Sierra Leone’s industrial landscape. Over the decades, the company has become synonymous with the extraction and supply of high-quality natural rutile, solidifying its position as a key global player.*
*The decision to close operations can be traced back to a protracted economic downturn, with Sierra Rutile feeling the pinch of diminished investment confidence. The company, which had thrived for years, is grappling with a decline in investor trust due to both local and global economic uncertainties. This lack of confidence has hindered Sierra Rutile’s ability to attract the necessary funding for sustaining operations and navigating challenging economic conditions.*
*The Bio regime’s imposition of stringent regulatory measures, coupled with burdensome taxation policies, has further strained Sierra Rutile’s operational capacity. Navigating through a complex regulatory environment has become increasingly challenging, with the company facing hurdles in meeting compliance standards while sustaining profitability. The tough taxation policies have added an additional layer of financial pressure, making it harder for Sierra Rutile to remain economically viable.*
*Sierra Rutile, as the largest private employer in Sierra Leone, currently provides livelihoods for over 2200 staff members. The impending closure will have severe implications for the local labor market, causing widespread unemployment and economic distress in the affected communities. Beyond the immediate workforce, the closure will also reverberate through the local economy, affecting businesses and services dependent on the company’s operations.*
*With Sierra Rutile supplying 20% of the world’s high-quality natural rutile, the closure has wider global ramifications. The disruption in the rutile supply chain could impact industries relying on this critical mineral, potentially leading to increased prices and supply shortages in various sectors.*
*Sierra Rutile Limited’s decision to shut down operations reflects the culmination of economic challenges, a lack of investment confidence, and the stringent regulatory environment imposed by the Bio regime. As Sierra Leone’s largest private employer faces closure, the repercussions will be felt not only in the local labor market and economy but also on a global scale due to the disruption in the supply of high-quality natural rutile. The situation underscores the delicate balance companies must navigate in a complex and ever-evolving economic and regulatory landscape.*
