Fastmarkets’s iron ore 66% Fe concentrate cfr Qingdao index reached a five-year high of $125.12 per tonne on July 5 and was at $120.76 per tonne on August 2.
“We can confirm that a temporary operating suspension imposed by the Minister of Mines (MoM) expired on July 24, following which the MoM requested that we do not export material, until they review compliance with our mining license agreement with the NMA,” Gerald said in a statement to Fastmarkets.
“We are cooperating with the ministry, and believe that we are in compliance and this will be quickly resolved, even though there is no legitimate basis to suspend operations or preclude any exports,” Gerald added.
Sierra Leone’s mining ministry had not responded to a request for comment by the time of publication.
At his formal in-office ceremony on July 3, Yokie pledged his commitment to revisit all mining agreements and cancel those that are not in the interest of the people of Sierra Leone, according to several local news reports.
SL Mining was awarded a renewable large-scale mining license in March 2017 for Marampa, granted under the Mines and Minerals Act, 2009, for a term of 25 years. The license was ratified by Sierra Leone’s parliament on December 6, 2017.
Craig Dean, chairman of Gerald Group and SL Mining, is currently in Freetown in Sierra Leone to negotiate with the ministry.
Other mining companies in Sierra Leone have been targeted by the government of President Julius Maada Bio in past months. Shandong Iron & Steel Group had its license for the Tonkolili mine cancelled on June 3 because Yokie said they “had not paid their annual licenses fees and lease rent since August 2018,” an accusation that Shandong has since challenged in court.
The Marampa mine, which is in the Port Loko district in the northern province of Sierra Leone, was commissioned in January 2019 and reached full production in early March. SL Mining shipped its first iron ore concentrate cargo from the Freetown porton June 16.
In total, it has exported around 170,000 tonnes of high-grade iron ore concentrate in three shipments to China, Fastmarkets has learned. The ore, which is branded “Marampa Blue”, has around 65.5-65.6% of iron content.
Iron ore concentrate market prices have been increasing in line with the rise in the iron ore fines market, with Fastmarkets’ iron ore 65% Fe Brazil-origin fines cfr Qingdao index at $118.20 per tonne on August 2, down from a peak of $133.10 a month ago but still around record high levels.
Gerald Group has invested over $100 million in SL Mining since inception to bring Marampa back into production and upgrade the iron ore content to 65% from 62% previously.
Gerald became involved in the Marampa mine in November 2014 when it signed an offtake credit agreement with Frank Timis’ Timis Mining Corp (SL) Ltd (TMC) after London Mining went into administration. Marampa was transferred to TMC but put on care and maintenance shutdown in March 2015 due to historic debts and very low iron ore prices.
In 2017, the government cancelled TMC’s mining license and granted the area to Gerald’s SL Mining in a move that was legally challenged by Frank Timis. A settlement was reached out of court in January 2018, sources told Fastmarkets.
Andrea Hotter in New York contributed to this article.