US AmbassadorBryan David Hunt
During a recent radio interview on Epic Radio, conducted on Wednesday, October 25, 2023, Bryan David Hunt, the newly appointed US Ambassador to Sierra Leone, advocated for the implementation of a transparent public tendering process to determine the most suitable entity for managing the Pepel Rail and Port.
According to Ambassador Hunt, this approach is vital to maximize the government’s benefits and uphold its responsibility of ensuring universal access to the infrastructure for all stakeholders within the mining industry. The discussion primarily revolved around the operations of Marampa Mines Limited, a prominent US-based mining firm operating in Sierra Leone, and its utilization of the Pepel Rail and Port. In his statement, Ambassador Hunt emphasized the critical importance of making the infrastructure accessible to all stakeholders involved in mining activities and expressed confidence in the Sierra Leonean government’s commitment to facilitating access and conducting transparent processes. He noted that these efforts exemplify the collaborative approach aimed at bolstering the mining sector and ultimately benefiting the entire nation. It is worth noting that a private and confidential memorandum, issued by Legal Counsel, Craig Dean, on October 13, 2023, highlighted concerns regarding the ongoing negotiations between Kingho Rail and Port and the Government of Sierra Leone (GoSL) concerning a proposed 20-year lease agreement for the Pepel Rail and Port.
This memorandum outlined crucial changes required to avert potentially adverse consequences for third parties while enhancing competition and accountability. The memorandum underlined that the existing draft of the lease if adopted without alterations, would negatively impact third parties, particularly Marampa Mines Limited (MML). This impact would manifest in constraints on MML’s expansion, ultimately resulting in reduced royalties and contributions to the Community Development Fund allocated to the GoSL. In response to these concerns, MML Legal has put forward a series of recommended changes to the lease agreement. The primary objective of these proposed modifications is to protect the interests of all stakeholders, promote equitable utilization of the rail and port infrastructure, and ensure that fair competition prevails.
The key changes proposed by MML Legal encompass several critical aspects: 1. Duration of Lease (Section 2.01): The current 20-year term is deemed excessive and unfavourable for fostering competition and effective infrastructure utilization. MML Legal recommends reducing the lease duration to 5 years. 2. Access for Third Parties (Section 2.03): The draft lease proposes granting third parties minimal access, equivalent to only 10% of the existing capacity, which is considered inadequate. MML Legal proposes that Kingho should offer access to up to 50% of the existing capacity, thus ensuring sufficient space for third-party entities. 3. Notice for Shipment Needs (Section 2.04): The requirement of providing a 4-month notice for shipment needs is seen as unworkable. MML Legal suggests reducing this notice period to a more practical 1 month. 4. Prohibition of Purchasing from Third Parties (Section 4.06): To prevent Kingho from pressuring other mining operators to sell their products, a clause should be introduced prohibiting Kingho and its affiliates from purchasing materials from other potential users of the Railway and Port. 5. Operating Standards (Section 4.07): The Lessee should be obligated to operate and maintain the Demised Properties by best practices and international standards. 6. Language Usage (Section 4.08): MML Legal recommends that the English language be mandated for all company documents to ensure clarity and consistency. 7. Events of Default (Section 10.01): The proposed changes introduce new events of default, holding accountable any failure to maintain and expand the rail and port infrastructure. 8. Review Period (Section 18.08): The lease review period should be adjusted to every 2 years. Additionally, provisions allowing for the introduction of another rail and port operator should be considered. These recommended changes are designed to safeguard the interests of third parties, foster competition, and facilitate fair and transparent usage of the rail and port infrastructure. The extent to which these suggestions will be integrated into the finalization of the Kingho Rail & Port Lease Agreement remains to be seen.
