ex10-4.htm


    EXHIBIT 10.4

     

     

     

    

    


     

    Government
of Sierra Leone

     Ministry
of Mineral Resources and Political Affairs

    


    


    


    


    


    


     

    A Guide
to the Mines and Minerals Act

     

    2009

     

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    Purpose of this
Guide

     

    The Mines
and Minerals Act 2009 represents a new era for minerals development in Sierra
Leone. Replacing the Act of 1994, it includes major changes to how the sector is
to be governed. It is more comprehensive with respect to the issues it
addresses; more balanced between the interests of investors and communities; and
more rigorous in terms of governance and oversight. Making Sierra Leone a leader
in West Africa in terms of mining legislation, it is intended to bring important
benefits to the economy, local communities and the country.

    


     

    The
purpose of this Guide is to explain the main provisions in the law, differences
from the previous law, rationale behind the changes, and implications for
affected stakeholders. Each section of the law is summarised, followed by a
presentation of key provisions. The Guide is part of a broad information
campaign designed to sensitise stakeholders and citizens in order to ensure the
law is effectively implemented and its intended benefits are
realised.

    


     

    Development
of the Mines and Minerals Act 2009 is the final step of a multi-year
consultation process which began in 2005. This includes three years of effort by
the Law Reform Commission which engaged stakeholders throughout the country, and
intensive Government input throughout 2009.

    


    


    


    


     

    For
more information about the law, please contact:

    


     

    Ministry
of Mineral Resources and Political Affairs

     

    Permanent
Secretary:    Umaru Wurie

     

    Email:                                           uwurie@yahoo.com

    Telephone:                                   +232
76 671 200

    


     

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    Mines and
Minerals Act 2009: Contents Addressed in this Guide

    


     

    
      	
              Part
      III

            	
              Administration

            
	
              Part
      IV

            	
              Acquisition
      of Mineral Rights

            
	
              Part
      V

            	
              Mineral
      Rights and Surface Rights

            
	
              Part
      VI

            	
              Registration,
      Records and Cadastre

            
	
              Part
      VII

            	
              Surrender,
      Suspension and Cancellation of Mineral Rights

            
	
              Part
      VIII

            	
              Reconnaissance
      Licences

            
	
              Part
      IX

            	
              Exploration
      Licences

            
	
              Part
      X

            	
              Artisanal
      Mining Licences

            
	
              Part
      XI

            	
              Small-Scale
      Mining Licences

            
	
              Part
      XII

            	
              Large-Scale
      Mining Licences

            
	
              Part
      XIII

            	
              Radioactive
      Minerals

            
	
              Part
      XIV

            	
              Dredging

            
	
              Part
      XV

            	
              Protection
      of the Environment

            
	
              Part
      XVI

            	
              Community
      Development

            
	
              Part
      XVII

            	
              Health
      and Safety

            
	
              Part
      XVIII

            	
              Financial

            
	
              Part
      XIX

            	
              Miscellaneous

            
	
              Part
      XX

            	
              Regulations

            
	
              Part
      XXI

            	
              Repeal

            


    

    


     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    Key Objectives of the
Law

     

    The Mines
and Minerals Act 2009 has four main objectives:

    


     

    
      	
               
      I. 

            	
                 Addresses
      several issues not previously covered by the law including health and
      safety, environmental protection and community
  development.

            


    

    


     

    
      	
               
      II.

            	
                Tightens
      rules for administrators and mineral rights holders including application
      and reporting requirements.

            


    

     

    
      	
              III.  

            	
               
      Promotes investment and minerals sector development by ensuring security
      of tenure and preventing companies from holding land under license for too
      long without demonstrable
activities.

            


    

     

    
      	
              IV.  

            	
               
      Rebalances fiscal benefits — including higher royalty rates for precious
      stones and precious minerals - between companies, communities and
      government.

            


    

    


     

    How
does the law compare with international best practice?

    


     

    International
and regional best practice was a major contributor in to many of the law's
provisions. For example, royalty rates were compared with regional and
international levels; establishing a maximum allowable area for an exploration
license is common, introducing escalating minimum expenditure requirements for
exploration licence holders are increasingly being adopted elsewhere; providing
holders of exploration licences to explore for all minerals, not just specific
ones, is typicalpractice.

    


     

    The
law is consistent with all the main ECOWAS principles and policies governing the
mining sector, including the acquisition of mineral rights, respecting the
rights of landowners, protection of the environment, financial terms and
conditions and company reporting, access to information, state participation in
mining operations, respecting the rights of local communities, and providing
Government the right to acquire an interest in large-scale mining
operations.

    


     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    Administration

     

    Summary

    The Act
provides greater detail on the specific duties, responsibilities and conduct of
those charged with administering the Act, namely:

    • The
Minister responsible for mineral resources;

    • The
Director of Mines;

    • The
Director of Geological Survey;

    
      	
              •  

            	
              The
      Minerals Advisory Board (MAB), which has been given substantial new
      responsibilities.

            


    

    


     

    Key
Provisions

    The
Director of Mines exercises regulatory administration and supervision over all
reconnaissance, exploration and mining operations. This includes ensuring
compliance by holders of mineral rights with all provisions of the
Act.

    


     

    The
Director of Geological Survey is responsible for geological mapping as well as
compiling and disseminating data about the geology and mineral resources of the
country.

    


     

    The Minerals Advisory Board
(MAB)

    


     

    
      	
               
      ü

            	
               The
      revised MAB will advise the Minister on issues associated with the
      sector's development as well as certify that applications and renewals for
      mineral rights are fully compliant with the
law.

            


    

    
      	
               
      ü

            	
              The
      MAB will also advise the Minister on suspending, transferring and
      cancelling licences.

            


    

    
      	
               
      ü

            	
              The
      MAB will consist of representatives of the Ministry of Mineral Resources,
      selected other Government Ministries, and two persons with considerable
      qualifications and experience in the mining industry. It shall meet at
      least quarterly.

            


    

    
      	
               
      ü

            	
              A
      separate Chairman of the MAB will be appointed. Previously the MAB was
      chaired by the Director of Mines; the Director will now be the Secretary
      to the MAB.

            


    

    
      	
               
      ü

            	
              The
      MAB will also have new powers to co-opt persons from localities relevant
      to an application for a mineral right for deliberation
      purposes.

            


    

    
      	
               
      ü

            	
              The
      MAB must submit to the Minster an annual report of its activities and
      operations.

            


    

    


     

    The
Minister and other public officers are prohibited from acquiring mineral
rights.

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    The
Minister will have the authority to approve an application once it has been
certified compliant by the MAB. The Act will also require the Minister to
provide reasons for any refusals.

    


     

    
      	 
      	
              Composition
      of the Minerals Advisory Board

            
	 
      ●	
              Chairman

            
	 
      ●	
              Director
      of Mines

            
	 
      ●	
              Director
      of Geological Survey

            
	 
      ●	
              Commissioner-General
      of National Revenue Authority

            
	 
      ●	
              Representative
      of Attorney-General and Minister of Justice

            
	 
      ●	
              Representative
      of the Ministry responsible for local government

            
	 
      ●	
              Representative
      of the Ministry responsible for the environment

            
	 
      ●	
              Permanent
      Secretary, Ministry of Mineral Resources

            
	 
      ●	
              Two
      persons with considerable qualifications and experience in the mining
      industry

            


    

    


     

    Acquisition of Mineral
Rights 

     

    Summary

    The Act
creates clearer and more logical categories for mineral rights, addressing some
of the confusion previously created with prospecting and exploration and
exclusive and non-exclusive licences. The Act more clearly defines that
applications for mineral rights will be considered on a first come- first serve
basis, and based on strict financial and technical criteria. The Act also
enables Government to award mineral rights through a public tender
process.

    


     

    
      	
              Act
      of 1994

            	
              Act
      of 2009

            
	
              Non-Exclusive
      Prospecting

            	
              Reconnaissance
      Licence (non-

            	 
      
	
              Licence

            	
              exclusive)

            	 
      
	
              Exclusive
      Prospecting Licence

            	
              Exploration
      Licence (exclusive)

            	 
      
	
              Exploration
      Licence

            	
              Artisanal
      Mining Licence

            	 
      
	
              Artisanal
      Mining Licence

            	
              Small-Scale
      Mining Licence

            	 
      
	
              Mining
      Lease

            	
              Large-Scale
      Mining Licence

            	 
      
	 
      	 
      


    

    


     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    Key
Provisions

    No person
may explore for or mine minerals except as part of a mineral right granted under
this law. Any person who violates this provision faces a fine and/or a prison
sentence.

    


     

    No
mineral right shall be granted to:

     

    
      	
              •  

            	
              an
      individual (i) under the age of 18; (ii) who is not a citizen of Sierra
      Leone or who has not been a resident of Sierra Leone for a period of ten
      years immediately preceding the application; (iii) who is bankrupt; or
      (iv) has been convicted of fraud;

            


    

     

    • a
co-operative society which is not legally registered in Sierra
Leone;

     

    
      	
              •  

            	
              a
      corporate body which is (i) not registered or incorporated in Sierra
      Leone; (ii) in liquidation; (iii) being liquidated; (iv) has a shareholder
      holding at least ten percent of the company or has a director which
      violates one of the requirements for individuals as listed
      above.

            


    

    


     

    All
applications for mineral rights or renewals of mineral rights shall be submitted
to the Mining Cadastre Office.

    


     

    The
decision on an application for a reconnaissance licence, exploration licence,
small-scale mining licence or large-scale mining licence shall be made no later
than 60 days after submission of the application.

    


     

    The
decision on an application for an artisanal mining licence shall be made no
later than 14 days after submission of the application.

    


     

    The
Minister may designate specific areas as areas for either artisanal mining or
small-scale mining activity.

    


    


     

    Mineral Rights and Surface
Rights                                                                                                                                      

     

    Summary

    The Act
more clearly defines the relationship between land owners/occupiers and holders
of mineral rights.

    


     

    Key
Provisions

    
      	
            	
            	
              The
      Act restricts the ability of a mineral right holder to exercise their
      rights on:

               

                 • land dedicated
      for other public purposes (e.g. cemetery, parks, roads etc.) unless
      written consent is given by the responsible authority over such
      land;

            


    

    


     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
      	
              •  

            	
              land
      reserved for a railway, highway or waterway within 50 metres unless
      written consent is given by the responsible
  authority;

            


    

     

    
      	
              •  

            	
              land
      within 200 metres of the boundaries of any township unless written consent
      is given by the relevant local
authority.

            


    

    


     

    Written
Consent from Landowners/Occupiers

    


     

    To
exercise mineral rights, the holder of a mineral right must obtain written
consent from the Landowner or Occupier for:

    


     

    ü Land
dedicated as a place of burial or which is a place of religious or cultural
significance; 

    ü    
Land on or within 200 metres of any inhabited, occupied or temporarily
unoccupied dwelling; 

    ü Land within 50
metres of land which has been cleared or ploughedfor agriculture including the
growing of crops;

    
      	
               
      

            	
              ü     Land
      which is the site of or is within 100 metres of any cattle dip, tank, dam,
      or other body of water.

            


    

    


     

    The
Minister may judge that consent is being unreasonably withheld and allow the
holder of a mineral right to exercise those rights.

    


    


    


    


    


     

    The Act
makes provisions for rights to graze stock and cultivate land as long as this
activity does not interfere with the use of the area for reconnaissance,
exploration or mining operations.

    


     

    No holder
of a mineral right shall create unprotected pits, hazardous waste dumps or other
hazards that may endanger the stock, crops or other activity of the land owner
or occupier.

    


     

    As in the
past, the Act requires mining companies to enter into surface lease arrangements
with the Government or landowners. If agreement cannot be reached between the
parties, the Minister may determine the agreement upon the advice of the
Minerals Advisory Board.

    


     

    Compensation

    The
Act provides for payment offair and reasonable compensation for disturbances
foreseen by operations and damage done to the surface of the land. If the holder
of a mineral right fails to pay compensation when demanded, or if the
owner/occupier of the land is dissatisfied with any compensation offered, such
compensation may be determined by the Minister on the advice of the Minerals
Advisory Board.

     

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    The Act
introduces an explicit sub-section on the right to resettlement for affected
parties by clarifying the rights and responsibilities of communities and mining
companies.

    


     

    Resettlement

     

    
      	
               
      ü

            	
               The Minister shall ensure that
      all owners or lawful occupiers are resettled on suitable alternate land
      should they prefer to be compensated by way of resettlement as a result of
      being displaced by a mining
operation.

            


    

    
      	
               
      ü

            	
               The circumstances
      of those being resettled must be at least equal to their circumstances
      before resettlement.

            


    

     ü     
The resettlement must
be carried out according to relevant planning laws.

       ü      
The cost of
resettlement must be paid by the holder of the mineral
right.

    


    


    


    


     

    Registration, Records and
Cadastre                                                                                                                                     

     

    Summary

    The Act
substantially strengthens provisions associated with the registration of mineral
rights. It legitimises the role of a Mining Cadastre Office and stipulates the
procedures associated with registering an application and a licence. The new
provisions provide clearer guidance on the management of records, clarifying
what information is to be held in confidence and what shall be available to the
public.

    


     

    Key
Provisions

    The
Mining Cadastre Office will maintain:

    • the
register of mineral rights;

    • the
register of mineral rights applications;

    • the
cadastral survey map of mineral rights and mineral rights
applications.

    


     

    The
Cadastral Survey Map shall have marked on it:

    • All lands
for which licences granting mineral rights are in force;

    • All lands
for which licence applications for mineral rights are pending;

    • All lands
closed to mining operations.

     

     

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    The
public may access the following information at the Mining Cadastre
Office

    


     

    ü  Register of mineral
rights

    ü  Register
of mineral rights applications

    üCadastral
survey map of mineral rights and applications

    ü Non-confidential
agreements and reports submitted by past or present holders of mineral
rights

    


     

    
      	
               
      

            	
              Confidential
      information submitted by a holder of a mineral right shall become
      non-confidential 90 days after the expiry of the mineral
      right.

            


    

    


    


    


    


    


    


     

    Surrender, Suspension and
Cancellation of Mineral
Rights                                                                                                                                      

     

    Summary

    The Act
specifies the processes and conditions under which a mineral right can be
suspended and/or cancelled. New provisions have been included explicitly
requiring companies to submit reports, meet minimum expenditure requirements,
comply with community development obligations and not employ child labour; this
is in addition to previous provisions associated with health and safety,
protection of the environment and qualifications of mineral rights
holders.

    


     

    The Act
introduces the authority to temporarily suspend an operation under certain
conditions and provides greater detail on the issuance of notices and the
provision of documentation from a mineral right holder.

    


     

    As with
the existing law, the Act also provides clarity on the treatment of assets at
termination of a mineral right.

    


     

    Key
Provisions

    The
holder of a mineral right may surrender the area covered by the mineral right by
providing the Minister not less than 90 days notice. In such a case the Minister
shall issue a certificate of surrender.

    


     

    The
Director of Mines may in writing order reconnaissance, exploration or mining
operations to be temporarily suspended until such arrangements are made that are
considered necessary to prevent danger to life, property or the environment, or
to comply with the law. The Minister shall confirm a temporary suspension
order.

     

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      	
              The
      Minister may suspend or cancel a mineral right if the
    mineral

            
	 
      	
              right
      holder:

            
	 
      ●	
              Fails
      to make any required payments

            
	 
      ●	
              Fails
      to meet any minimum annual programme of work or required work
      expenditure

            
	 
      ●	
              Grossly
      violates health and safety regulations or causes environmental
      harm

            
	 
      ●	
              Employs
      child labourers

            
	 
      ●	
              Fails
      to submit required reports

            
	 
      ●	
              Violates
      any provision of this Bill

            
	 
      ●	
              Dies
      and his heir or successor is not qualified to hold a mineral
      right

            
	 
      ●	
              Becomes
      bankrupt or of unsound mind

            
	 
      ●	
              Knowingly
      makes andfalse statement to the Minister

            
	 
      ●	
              Fails
      to substantially comply with the terms of the community development
      agreement

            


    

    


     

    Before
suspending or cancelling the mineral right, the Minister shall provide the
opportunity for the holder to remedy the breach in not less than 30
days.

    


     

    The
Director of Mines shall exercise the same powers for artisanal mining licences
but for this need not consult the Minerals Advisory Board.

    


     

    Where the
holder of a mineral right intends to cease operations, he shall furnish to the
Director a full register of assets showing which assets he intends to remove and
which assets he intends to leave in the area. Upon ending of operations by the
holder of a mineral right, the area so covered shall revert to the
owner.

    


     

    Upon
termination of a mineral right the holder shall deliver to the Director of Mines
all records and reports, plans or maps of the area, and a final
report.

    


    


     

    Reconnaissance
Licences

     

    Summary

    The Act
provides for the creation of a Reconnaissance Licence which will effectively
replace the current prospecting licence category. The objective of this new and
short non-exclusive licence is to provide potential investors an opportunity to
identify specific areas for more extensive exploration. It provides a logical
entry point for companies while not locking up large areas to individual
companies.

    


     

    As with
all applications covered within the law, the Act provides clearer guidelines on
what needs to be included in an application, the necessary prerequisites for a
licence to be approved and the process associated with disposing of an
application and issuing a licence.

     

     

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    Key
Provisions

    An
application for a reconnaissance licence shall be submitted to the Mining
Cadastre Office and may be granted or rejected by the Minister.

    


     

    The
application for a reconnaissance licence shall include:

    


     

    ü Name, place of
incorporation, information about directors and certain shareholders S  Company profile
and history of reconnaissance and exploration operations in Sierra Leone and
elsewhere

    üA plan for the reconnaissance
licence area S A description of the contiguous
blocks S  Technical and financial resources
available

    üProposed
programme of reconnaissance operations including details of the equipment to be
used S Details of any
mineral rights held in Sierra Leone

    üDetails of any
significant adverse effects which the carrying out of the programme
of

    reconnaissance
operations would have on the environment and the estimated cost of addressing
such adverse effects

    ü Details about
the employment of Sierra Leone citizens

    


    


    


     

    An
applicant may appeal to the court against a decision by the Minister not to
grant a reconnaissance licence.

    


     

    Reconnaissance
Licence: Key Features

    


     

    
      	
               
      ü

            	
              All reconnaissance licences
      will be non-exclusive and validfor 1 year, with only the possibility of a
      further 1year renewal

            


    

     

    ü Limited
in size to 10,000sq km, not transferrable

    


     

    
      	
               
      ü

            	
              While
      the initial one year licence non-exclusive license can be issued quickly
      by the Minister (based on meeting a strict set of conditions) any
      applications for a further 1 year renewal will need to be certified by the
      Minerals Advisory Board.

            


    

    


    


    


    


     

    The
holder of a reconnaissance licence may, with specific permission and under
strict conditions:

    • Enter on
or fly over the area;

    • Take and
remove specimens and samples;

    • Sell
mineral specimens and samples;

    • Take
timber or water from any lake or watercourse;

    • Erect
camps and temporary buildings.

     

    


    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    All
reconnaissance licence holders shall:

    


     

    ü Begin operations within 90 days of the
date of issue of the licence 

    üNot engage in drilling, excavation,
or other subsurface exploration techniques 

    ü Be subject to all taxes, royalty and
otherfees relating to a sale of minerals 

    ü Compensate users of landfor damage
to land and property

    
      	
               
      ü

            	
              Maintain
      and restore from any damage the land to a safe state and in compliance
      with environmental laws

            


    

    ü Within 60 days
of the licence's expiration remove camps, temporary buildings or machinery
and
repair any damage to the surface of the ground 

    ü Expend on
reconnaissance operations according to the programme of reconnaissance
operations

    ü Submit a
confidential annual report to the Director of Mines 

    üProvide
the full results of any airborne geophysical survey 

    ü Employ and train
Sierra Leoneans

    


    


    


    


     

    Exploration
Licences

     

    Summary

    The draft
Act proposes substantial changes to the exploration licence category. The
cadastre and licensed areas are changed to a square block system, making it
easier to map areas and calculate fees.

    


     

    Key
Provisions

    An
application for an exploration licence shall be submitted to the Mining Cadastre
Office which will forward the application to the Minerals Advisory Board which
certifies that each company has complied with the requisite conditions of the
licence. The application shall be granted or refused by the Minister. If the
application is refused, the Minister shall provide reasons for the
refusal.

     

    
 

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    The
application for an exploration licence shall include:

    


     

    üName,
place of incorporation, information about directors and certain shareholders


    ü Company profile and history of
exploration operations in Sierra Leone and elsewhere 

    ü A plan for the exploration licence
area S A description of the contiguous
blocks 

    ü Technical and financial resources
available

    üProposed
programme of exploration operations including details of the equipment to be
used 

    ü
Details of any mineral rights held in Sierra Leone

    ü
Details of any significant adverse effects which the carrying out of the
programme of reconnaissance
operations would have on the environment and the estimated cost of addressing
such adverse effects

    ü
Details about the employment of Sierra Leone citizens

    


    


    


     

    An
applicant may appeal to the court against a decision by the Minister not to
grant an exploration licence.

    


     

    Exploration
Licence: Key Features

    


     

    ü An exploration licence shall not
exceed 250 sq km for an individual licensed area.

     

    
      	
               
      ü

            	
               Companies may
      apply for an initial 4 year licence, after which companies will be
      required to relinquish down to 125sq km of the area under licence (a
      special provision allows an exception, but will lead to an escalation in
      licence fee) and apply for a 3 year renewal period; this can be further
      renewed once more for 2

            


    

    years.

    
      	
               
      ü

            	
              Companies
      will be able to retain an exclusive exploration licence for a maximum of 9
      years (over three licensed periods), reduced from 11 years previously
      (over six licensed periods — combining prospecting and
      exploration).

            


    

    
      	
               
      ü

            	
               The Bill
      introduces an escalating minimum expenditure requirement for exploration
      licence holders.

            


    

    


    


    


    


    


    


     

    The
holder of an exploration licence may, with specific permission and under strict
conditions:

    • Explore
for all minerals on the area;

    • Drill
boreholes and make necessary excavations;

    • Take and
remove specimens and samples;

    • Take
timber or water from any lake or watercourse;

    • Erect
camps and temporary buildings.

     

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    Holders
of exploration licences shall...

     

    üBegin operations within 90 days of
the date of issue of the licence

    üCarry out exploration according to the
approved exploration programme and comply with the annual
programme of expenditures 

    ü
Not remove any mineral from the area except to be analysed, valued or
tested S Be subject to
all taxes, royalty and other fees relating to a sale of minerals S Inform landowners and users
of land about exploration operations üCompensate
users of landfor damage to land and property

    ü
Maintain and restore from any damage the land to a safe state and in
compliance with environmental
laws 

    ü
Notify the Minister of any discovery within 30 days 

    ü
Backfill or otherwise make safe any boreholes or excavations

    üS  Within 60 days of the licence's
expiration remove camps, temporary buildings or machinery and repair
any damage to the surface of the ground S Submit a confidential
semi-annual annual report to the Director of Mines and Director of Geological
Survey 

    üProvide the
full results of any airborne geophysical survey S Employ and train Sierra
Leoneans

    


    


    


    Exploration
licences shall give the holder the right to explore for all minerals, w hich is
different from the previous regime where licences were issued for specific
minerals.

    


    


     

    Artisanal
Mining Licences

     

    Summary

    The Act
makes a number of small changes to artisanal mining licence provisions. It
further strengthens the obligations of miners to rehabilitate mined out areas,
maintain records, submit reports, and respect worker rights.

    Ultimately,
the improvements to managing the artisanal mining sector will come through
regulations, where far greater detail will be provided. Within these regulations
there will be explicit reference to the supporter-miner relationship and tools
will be put in place to clarify the relationship and better protect each party's
interests. While most of the nation's artisanal mining has been focused on
alluvial diamonds, the law and associated regulations have been drafted in the
context of other minerals being exploited.

    


     

    Key
Provisions

    Only
individuals, partnerships, co-operative societies and incorporated companies
comprising of Sierra Leonean citizens will be eligible for artisanal mining
licences which are issued by the Director of Mines.

     

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    
      	
              The
      application for an artisanal mining licence shall
  include:

            
	
                    
                ü

              

            	
              details
      on the experience and capital available to the applicant (declaring
      any

            
	 
      	
              supporter/finance
      relationship);

            
	
                    
                ü

              

            	
              a
      plan of the area;

            
	
                    
                ü

              

            	
              documentary
      evidence that consent to use the landfor mining purposes has been given
      by

            
	 
      	
              the
      Chiefdom Mining Allocation Committee or the rightful owners/occupiers of
      the

            
	 
      	
              land;

            
	
                    
                ü

              

            	
              details
      of the proposed mining operations, including potential effect on the
      environment

            
	 
      	
              or
      other risk — including proposals to mitigate them;

            
	
                    
                ü

              

            	
              details
      over the marketing arrangements for the produced
  minerals.

            


    

    


     

    The
holder of an artisanal mining licence shall have the exclusive right to carry on
exploration and mining operations in the licensed area. The holder of an
artisanal mining licence may enter the licensed area and remove mineral from the
area.

    


     

    Artisanal
Mining Licence: Key Features

    


     

    
      	
               
                      
                ü

              

            	
               

                  Artisanal
      mining licences will be issued for half hectare plots (harmonizing the use
      of metric)

            


    

     

    
      	
               
                      
                ü

                 

              

            	
               

                  Artisanal
      mining licences will be validfor one year, and renewable up to three times
      each not exceeding a period of one
year.

            


    

     

    
      ü
 The depth of an artisanal mine is limited to 10
meters.

    

     

    
      ü
Artisanal mining licences are not
transferable.

    

    


    


    


     

    Holders
of artisanal mining licences shall...

    ü  Carry out exploration or mining
operations in good faith

    ü
Provide relevant information to the Director of Mines

    üPromptly carry
out directives to ensure safety or good mining practices

    üIf not
personally supervising exploration or mining operations, employ a Mines Manager
as approved
by the Director of Mines for this purpose 

    ü
Employ not more than 50 labourers per licence 

    ü
Sell the minerals obtained as prescribed S  Carry out
rehabilitation and reclamation of mined out areas 

    ü
Keep accurate records of winnings 

    ü
Submit all relevant reports

     

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    The
Director may revoke an artisanal mining licence if the holder is not a Sierra
Leonean citizen or no mining operations have begun within a period of 180 days
from the date of registration or licence renewal.

    


    


     

    Small-Scale Mining
Licences

     

    Summary

    Although
there are mineral deposits that would be more effectively exploited through
mechanised methods at a scale larger than artisanal mining, these would clearly
not justify all of the investment required to develop a large 25 year mine. By
creating a middle category of small-scale mining licences, the Government will
be better able to match obligations with scale of operations.

    


     

    Regarding
the potential conflict between artisanal and small-scale mining, it must be
noted that not all small-scale mines operate in alluvial diamond fields (where
most of the tension arises); some operate quarries servicing road construction
and building material, and others operate small scale gold mines. However, any
potential for conflict in the mineral sector should be taken seriously and the
Act empowers the Minister to declare specific areas for exclusive use by
artisanal miners.

    


     

    Similarly,
the Minister can declare other areas for exclusive use by small-scale miners. In
order for this provision to be effective it will be important for the Government
to consult with stakeholders and assess deposits to best balance the interests
of the communities with accelerated mineral production.

    


     

    Under the
Act the applicant will be required to produce an Environmental Impact Assessment
and Management Plan, and hold an Environment Licence.

    


     

    Key
Provisions

    All small
scale mining licence applications must first be submitted to the Mining Cadastre
Office, then certified legally compliant by the Minerals Advisory Board, and
then given to the Minister for approval.

    


     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    Small-scale
licence holders will be required to provide the Government with some form of
financial assurance against its environmental obligations.

     

    An
application for a small-scale mining shall include:

    üPlan of the
area

    üEvidence that
consent to use the land has been given by the Chiefdom Mining Allocation
Committee or the rightful landowners
or occupiers 

    ü
Identification of the
minerals for which the licence is sought 

    üA
technological report on mining and treatment possibilities

    üProposedprogramme of mining operations, including the
likely effects on the environment and on the
local population and the proposals for mitigation and compensation measures


    üAn
environmental impact assessment licence

    
      	
               
      

            	
              üA
      detailed forecast of capital investment, operating costs and revenues, and
      the anticipated type and source of
financing

            


    

     

    
      	
               
      

            	
              üA report
      on the goods and services required for the mining operations which can be
      obtained within Sierra Leone

            


    

     

    ü
Proposals for the employment and training of citizens of Sierra
Leone

    ü
Proposals for insurance cover including health and life insurance cover
for employees

    üExpected
infrastructure requirements

    ü
Proposed marketing arrangements for the sale of the mineral production
S Details of any mineral
rights held in Sierra Leone

    


    


    


    


    


    


     

    No
small-scale mining licence shall be granted to an applicant for an area
designated for artisanal mining operations.

    


     

    Small-Scale
Mining Licence: Key Features

    


     

    
      	
               
      

            	
              üLicences
      are issuedfor three year periods, renewable upon application. The relative
      short period provides more opportunities for the Minerals Advisory Board
      to review performance and
compliance.

            


    

     

    
      	
               
      

            	
              ü
      A requirementfor licence holder (companies, partnerships or
      cooperatives) to be 25% owned by Sierra Leonean
  citizens.

            


    

     

    • Issued
over a maximum area of 1 sq km (down from 5 sq km previously used).

     

    
      	
              •  

            	
              May
      excavate up to 20 meters below the surface and prohibitedfrom tunnelling,
      driving adits or other underground
openings.

            


    

    


    


    


    


     

    The
Minister may revoke a small-scale mining licence if citizens of Sierra Leone
hold less than 25% of the shares of the holder, or no mining operations have
begun within a period of 180 days from the date of registration or licence
renewal.

     

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    All
holders of small-scale mining licences shall...

     

    ü  Carry out exploration or mining
operations in good faith

    ü
Provide relevant information to the Director of Mines

    üPromptly carry
out directives to ensure safety or good mining practices

    ü
If not personally supervising exploration or mining operations, employ a
Mines Manager as approved
by the Director of Mines for this purpose 

    ü
Notify the appropriate local government authority of the intention to
begin or cease exploration 

    üSubstantially
comply with any community development agreement 

    üSell the minerals obtained as prescribed


    üCarry out rehabilitation and reclamation of
mined out areas 

    üKeep accurate
records of winnings 

    üSubmit all
relevant reports

    


    


    


    


    


     

    Large-Scale Mining
Licences

     

    Summary

    The
application for a large-scale mining licence now requires far more information
than previously.

    


     

    The Act
establishes the mine plan, community agreement, employment and training
programme, environmental management plan, and procurement proposal as binding
obligations on a large scale mining licence holder — thus forming the terms and
conditions of the licence. The Act also goes further to define additional rights
and obligation of licence holders, the process through which to renew a licence,
the authority of the Director to address wasteful and harmful practises, the
process and conditions associated with terminating, suspending or reducing
operations, and transferring of a large scale mining licence.

    


     

    Key
Provisions

    All
large-scale mining licence applications must be submitted to the Mining Cadastre
Office, then considered and certified legally compliant by the Minerals Advisory
Board, and then given to the Minister for approval.

     

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    An
application for a large-scale mining shall include:

    


     

    ü
Information about the company, its directors and
shareholders

    üCompany profile and history of exploration
operations in Sierra Leone and elsewhere

    üPlan of the
area

    üIdentification
of the minerals for which the licence is sought S Details of the mineral
deposits in the area S  Technological
report on mining and treatment possibilities 

    üProposed programme of mining operations,
including:

    o   Estimated
date by which the applicant intends to work for profit

    o   Estimated
capacity of production and scale of operations

    o   Estimated
overall recovery of ore and mineral products

    o   Nature
of the products

        o   Proposals
for the progressive reclamation and rehabilitation of land disturbed by mining


        o   Effects
of the mining operations on the environment and on the local population and the
proposals for mitigation, compensation and resettlement measures 

    ü
A detailedforecast of capital investment, operating costs and revenues,
and the anticipated type and source of financing

    üIdentification
of interested and affected parties including land owners and occupiers of the
area 

    ü
Details of consultation with interested and affected parties

    
      	
               
      

            	
              ü
      A report on the goods and services required for the mining
      operations which can be obtained within Sierra
  Leone

            


    

     

    ü
Proposals for the employment and training of citizens of Sierra
Leone

    ü
Proposals for insurance cover including health and life insurance
coverfor employees

    ü
Expected infrastructure requirements

    üProposed
marketing arrangements for the sale of the mineral production 

    ü
Details of any mineral rights held in Sierra Leone 

    ü
Environmental impact assessment licence

    


     

    


    Any
person impacted by the decision may appeal the Minister's decision in court if
they so wish.

    


     

    Subject
to Minister approval, the holder of a large-scale mining licence may make
amendments to:

    • the
programme of mining operations;

    • the
environment management programme;

    • the
programme of employment and training of Sierra Leone citizens.

     

    


    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    Large-Scale
Mining Licence: Key Features

     

    


     

    üInitial maximum 25 year licence, option to renew
in 15 year periods. 

    üMaximum area of250 sq km per licence (an upper
limit is new.

    üRequirement to complete an Environmental Impact
Assessment and acquire an Environment Licence.

    üRequirement to enter into a binding Community
Development Agreement with affected communities.

    üRequirement to develop a programme for employing
and training citizens of Sierra Leone

    üLicences are issuedfor three year periods,
renewable upon application. The relative short period

     

     

     

    


    


     

    All
holders of large-scale mining licences shall.

     

    üDevelop and mine the mineral deposits according
to the approved programme of mining operations and the environmental management
programme

    üCommence mine development within 180 days of
registration of the licence 

    üProperly demarcate the large-scale mining
licence area 

    üMaintain complete and accurate technical and
financial records 

    üNotify the Minister as soon as the holder begins
work forprofit 

    üSubstantially comply with any community
development agreement 

    üCease the carrying out of wasteful mining and
treatment practices if requested 

    üNotify the Minister:

    o   one
year in advance if it proposed to permanently terminate production 

    o   6
months in advance if it proposes to temporarily suspend production 

    o   3
months in advance if it proposes to reduce the level of production

    


     

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    Comparison
of Mining Licence Categories

     

    
    

     

    
      	 	 Artisanal
      Mining	 Small-Scale
      Mining	 Large Scal
      Mining
	
               Application

            	
               Apply to
      director of Mines, or delegated official in the region

               

              Approval based on complying with clear requirements

               

              Only Sierra Leioncean citizens can  hold licence (individuals,
      partnerships, cooperatives, or body corporates)

               

              Must specify mining method

               

              Environment Management Plan

               

              Proof of financial and technical capacity

               

            	
               Must specify
      mining method, environmental impact, forecast investment procurement,
      infrastructure requirements

               

              Application certified as legally compliant by MAB and approved by
      Minister

               

              Applicant must acquire environmental licence 9requireing EIA and
      EMP)

               

              Companies, partnerships, and cooperatives must have 25% Sierra
      Leioncean ownership

            	
               Must define
      resource, perepare full financial plan, specify mining method,
      environmental impact, forecast, investment procurement, infrastructure
      requirements

               

              Application cerified as legally compliant by MAB and aproved by
      Minister

               

              Applicant must acquire environmental licence (requiring EIA and
      EMP)

               

              Locally incorporated companies (no restriction on nationality of
      owners)

            
	 Maximum
      Area	
               1/2
      hectares (5,000sqm)

               

            	 100 hectares
      (1 sq km)	 250 sq
      km
	 Duration	
               1
      year, renewable 3 times

               

            	 3 years,
      renewable for 3 year periods	 25 years,
      renewable for 15 year periods
	Operation	
               Open pit, up
      to 10 meters deep

               

            	 up to 20
      meters deep, no underground operations	 Any safe and
      responsible mining method
	 Obligations	
               Geneeral duty
      to protect environment, and workers health and safety

               

              Rehabilitation fee

            	
               Must compy
      with conditions of environmental licence

               

              Must provide financial assurance for environmental compliance 
      

               

              May be rquired to enter into Community Development Agreement

            	
               Must comply
      with conditions of environmental licence

               

              Must provide financial assurance for environmental compliance

               

              Required to enter into Community Development Agreements with affected
      communities

            


    

     

    Radioactive Minerals

     

    Summary

    The objective of this section is to more closely control any readioactive
minerals discovered or exploited in the country.

    
 

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    Key
Provisions

    The Act
requires mineral rights holders notify the Minister upon discovery of any
radioactive minerals.

    


     

    Mineral
rights holders must apply for, and acquire, separate permits for the
exploitation and export of radioactive minerals - contravening these provisions
will be considered an offence.

    


     

    The Act
also empowers the police to search premises and seize radioactive minerals
without warrant.

     

    Fines
and Penalties

    Those
who violate any provisions concerning radioactive minerals shall be fined not
less than $100,000 USD in the case of companies, and $20,000 USD in the case of
individuals who also face prison sentences of up to ten years.

    


    
 

     

    Dredging of Minerals Summary

    Mineral
right holders will require additional approval to dredge any river, stream,
watercourse, pond, lake or continental shelf for minerals. The objective of this
additional permission is to allow Government to more closely assess the mining
method and its potential environmental impact. A dredging permit places more
specific conditions on operating than normally provided for within the general
provisions associated with the protection of the environment.

    


     

    Key
Provisions

     

    As part
of an application for a licence, the applicant shall indicate:

     

    
      	
              •  

            	
              whether
      its exploration or mining operations will entail dredging and if so,
      whether the type of dredging will include
  flooding;

            


    

     

    • the types
of machines or equipment to be used in dredging;

     

    • whether
dredging is the only economically viable process of exploration.

    


     

    The application for
a dredging permit shall. .

     

    ü    State the consequences of
dredging including the destruction of monuments,sacred
places and burial grounds; 

    ü Be accompanied by a performance bond as
security for rehabilitation of mined out areas

     

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    Protection
of the Environment

     

    Summary

    The
provisions dealing with protection of the environment have been substantially
expanded.

    


     

    Key
Provisions

    The Act
requires all small-scale and large-scale mining licence holders to acquire
environmental impact assessment licences, in accordance with the Environmental
Protection Act 2000.

     

    
      	
               
      

            	
              The
      Environmental Impact Assessment must include the following
      information...

            


    

     

    • Detailed
description of the environment supported by relevant measurements

     

    
      	
              •  

            	
              Detailed
      description of the project including all phases of development,
      operations, reclamation and closure, and
  including:

            


    

    o   Detailed
resource requirements and emissions

    o   Identification of the likely major
environmental impacts

    o   Review
of residual and immitigable environmental impacts

    o   Broad
and detailed objectives regarding each environmental impact and
means

    for
achieving them o   Predicted effect of each environmental
mitigation activity o   Budget and timetables for
implementation

    o   Identification
of likely major social impacts and mitigation measures for each
o   Methodologies to be used for monitoring potential negative
impacts and the

    source
of funding for monitoring o   An environmental management
programme

    


    


    


    


    


     

    An
applicant for a mining licence that is required to submit an environmental
impact assessment must consult the public to introduce the project and verify
possible impacts.

    


     

    A mining
licence holder that is required to submit an environmental management programme
submit an annual environmental report to the Director of Mines and on this basis
the Director may suspend the licence if it is decided that the programme is not
succeeding.

    


     

    Any water
diversion must be approved as part of an environmental management
programme.

    


     

    All
small-scale and large-scale licence holders must provide financial assurance for
the performance against any obligations originating from an environmental impact
assessment and management plan.

     

    
 

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    Eligible
Forms of Financial Assurance

     

    • Surety
bond

    • Trust
fund with pay-in period

    • Insurance
policy

    • Cash
deposit

    • Annuities

    


    


     

    To
strengthen the Government's ability to manage environmental issues associated
with mining, the Act empowers the Minister to make specific rehabilitation
activities a condition of a mineral right.

    


     

    If the
company does not comply and the Government has to undertake work to remedy, the
amount expended will be considered a debt to the Government and recoverable in
court.

    


     

    Artisanal
mining licence holders are expected to submit a simple environmental management
plan detailing expected impacts and plans for mitigation and management of
impacts.

    


     

    Community
Development Summary

    The
Community Development Part of the Act is completely new. The Act creates an
obligation on large-scale mining licence holders to promote community
development and establishes the framework through which companies and
communities enter into formal agreements.

    


     

    Key
Provisions

    The Act
establishes the conditions under which a Community Development Agreement will be
required, as follows:

     

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    When
is a Community Development Agreement required?

    


     

    The
following criteria are used to determine when a Community Development Agreement
is required.

    


     

    1.     Mine
throughput:

    o
In the case of extraction of minerals from alluvial deposits: where annual
throughput is
greater than 1,000,000 cubic metres per year; 

    o
In the case of underground mining operations, where annual combined run-of-mine
ore and
waste production is greater than 100,000 tonnes per year; 

    o
In the case of open-cast mining operations extracting minerals from primarily
non-alluvial
deposits, where annual combined run-of-mine ore,  rock, waste
and

    overburden
production is greater than 250,000 tonnes per year.

    


     

        2.     Employment
— where the licence holder employs or contracts more than 100 employees or
workers
on a typical day.

    


    


    


     

    The
primary host community is the single community of persons mutually agreed by the
holder of the small-scale or large-scale mining licence and the local council.
However, if there is no community of persons residing within thirty kilometres
of any boundary defining the mining licence area, the primary host community
shall be the local council.

    


     

    While a
Community Development Agreement is formed between the mining company and
community, the Minister is required to approve the plan.

    


     

    The Act
establishes a minimum expenditure requirement for the holder of the mineral
right of 0.1% of gross annual revenue for the implementation of the
agreement.

    


     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    A
Community Development Agreement must
include                                                                                                   

    • The
person, persons or entity who represents the community

    • Objectives
of the community development agreement

     

    • Obligations
of licence holder which include:

    
      	
               
      

            	
              o   defining the social and
      economic contributions that the project will make to the sustainability of
      the community;

            


    

    
      	
               
      

            	
              o   assistance
      in creating self-sustaining, income generating activities — including
      local procurement for the mine;

            


    

    
      	
               
      

            	
              o   consultation
      and the development of a mine closure plan that prepares community for the
      eventual closure of the mine;

            


    

     

    • Obligations
of the host community with regard to the licence holder

     

    
      	
              •  

            	
              The
      means by which the agreement will be reviewed by both parties every five
      years and that modification must be mutually agreed
  upon

            


    

     

    
      	
              •  

            	
              Define
      the consultation and monitoring framework by which the community can
      participate in the planning, implementation, management and monitoring of
      activities undertaken through the
agreement

            


    

     

    
      	
              •  

            	
              Statement
      defining the process through which disputes will be resolved (including
      the involvement of the local authority and the
  Minister).

            


    

    


    


     

    In terms
of projects to be undertaken through the agreement, the following projects
should be considered:

     

    
      	
              •  

            	
              Educational
      scholarship, apprenticeship, technical training and employment
      opportunities for the community;

            


    

     

    
      	
              •  

            	
              Financial
      and other forms of contributions towards infrastructural development and
      maintenance involving education, health, roads, water, power and other
      community services;

            


    

     

    
      	
              •  

            	
              Assistance
      towards the creation and development of small and micro sized
      enterprises;

            


    

     

    • Agricultural
product marketing;

     

    
      	
              •  

            	
              Methods
      and procedures of environment and socio-economic management and local
      governance enhancement.

            


    

    


     

    All
agreements entered into by large-scale mining licence holders and communities
shall be approved by the Minister and the Act empowers the Minister to make
determinations where parties cannot come to agreement.

    


     

    The
Community Development Agreement will form part of a licence holder's obligations
and does not in any way replace other plans or agreements associated with
resettlement or community compensation obligations.

     

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    Health and
Safety

     

    Summary

    The Act
introduces a full Part on health and safety. Key Provisions

    The
duties of both holders of mineral rights and workers are clearly spelled
out.

    


     

    Health
& Safety: Duties of Mineral Rights Holders

    


     

    üS
Provide and promote conditions for safe operation and a healthy working
environment

    üInitiate
measures necessary to secure, maintain and enhance health and
safety;

    üEnsure the
mine is operated and maintained in such a way that workers can perform their
work
without endangering the health and safety of themselves or others 

    üEnsure that
persons who are not employees but who may be directly affected by activities at
the
mine are not exposed to any health and safety hazards 

    üEnsure that
all persons working at the mine have the necessary skills and resources to
undertake
their work safely 

    üS  Take all reasonable steps to
continuously prevent injury or loss of life when the mine is not being
worked

    üEstablish a
policy for the compensation of injured workers.

    


    


    


     

    Health
and Safety: Duties of Workers

    


     

    üComply with
all measures and procedures established by the mineral right holder to ensure
health
and safety at the mine. 

    üS  Take reasonable care to protect their
own health and safety and that of other persons. 

    üTake proper care of all health and safety
facilities and equipment. 

    üS
Report promptly any situation which he believes could present a risk to
health and safety.

    


     

    Any
worker shall have the right to leave the mine if he believes that circumstances
pose a serious danger to their own health and safety.

    


    No person
can discriminate against (dismiss, prejudice or disadvantage)an employee if they
are exercising their rights under the Act or under a collective agreement, or
for refusing to do anything they are entitled to refuse under the Act or a
collective agreement.

    


     

    The
holder of a mineral right must report any accident that results in the loss of
life or serious injury (serious injury-defined as incapacitated from doing usual
job for fourteen days). Failure to do so will be considered an
offence.

     

    
 

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    The Act
obligates the Minister to make regulations for securing, as far as possible, the
health and safety of employees involved in any operation associated with a
mineral right.

    


    


     

    Financial

     

    Summary

    In terms
of financial provisions, the objective of the Act is to create a balanced, clear
and level playing field for all those involved in the development of mineral
deposits.

    


     

    All
individuals and companies in Sierra Leone are subject to the Income Tax Act 2000
and its amendments. Within the Income Tax Act there is a specific schedule
dealing with the treatment of mining companies. The Act has been drafted with
the recognition of the Income Tax Act and where possible defers most tax issues
to the Income Tax Act. For example, royalty payments are considered an operating
cost of the mineral right holder and can be deducted as an operating expense in
calculating net income.

    


     

    To
promote transparency in the minerals sector, the Act has a section dedicated to
reporting, disclosure, disseminations of information related to revenues and
payments by both mineral right holders and Government. The Act goes quite far to
make this an obligation of the licence and contravening this provision will be
considered a prosecutable office.

    


     

    However,
there are a series of financial issues that are addressed directly by the Mines
and Minerals Act.

    


     

    Key
Provisions

    Defining
royalties for minerals (precious stones, precious minerals and all other
minerals). These are to be calculated based on market value (rather than ex-mine
price).

     

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    New
Royalty Rates

    


     

    
      	
               
      

            	
              ü Special Stone 15°% (new category for those
      precious stones that are valued at more than
  $500,000)

            


    

     

    üPrecious stones 65°%

    üPrecious metals 5°%

    üAll other minerals 3°%

    


    


     

    Exemption
from royalties may be given for samples exported for testing and
analysis.

    


     

    The Act
empowers the Minister to charge an annual amount for a mineral right, details of
which will be provided in regulations.

    


     

    Large-scale
mining licence holders are required to submit, to the Commissioner-General of
the National Revenue Authority, certified copies of all sales, management,
commercial and other financial agreement in excess of $50,000.

    


     

    All
transactions between companies are to be based on or equivalent to arms length
prices and in accordance to accepted international business
practices.

    


     

    The
chargeable income for any year of a holder of a large-scale mining licence is to
be calculated separately for each large-scale mining licence.

    


     

    The
Minister may secure financial guarantees from a mineral right holder for their
compliance with the Act.

    


     

    All
royalties, import duties, annual charges or other fees are considered as debt to
the Government and are recoverable in a court of competent
jurisdiction.

    


     

    The
Minister may order a person to provide information, or answer questions in
person, associated with the minerals obtained or value of minerals obtained.
Non-compliance will be considered an offence.

     

     

    
      
         

      

      
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    Transparency: Disclosure of Revenues
and Payments The Minister shall:

    
      	
              •  

            	
              develop
      a framework for transparency in the reporting and disclosure of revenue
      due to or paid to Government

            


    

     

    
      	
              •  

            	
              request,
      from any person engaged in the extractive industry, an accurate record of
      the cost of production and volume of sale of minerals
      extracted

            


    

     

    
      	
              •  

            	
              request,
      from any person engaged in the extractive industry, an accurate account of
      money paid by and received from such person at any
  period

            


    

     

    
      	
              •  

            	
              ensure
      that all payments due to the Government from a person engaged in the
      extractive industry, including taxes, royalties, dividends, bonuses,
      penalties, and levies, are made

            


    

     

    
      	
              •  

            	
              disseminate
      information concerning the revenue of the Governmentfrom the extractive
      industry at least annually.

            


    

    


    


    


    


    


     

    A person
engaged in the extractive industry must submit quarterly to the
Minister:

     

    
      	
              •  

            	
              a
      general report on his activities and revenue payments made to Government;
      and

            


    

     

    
      	
              •  

            	
              a
      report on payments made to landowners, occupiers, Paramount Chiefs, or
      Chiefdom Committees, including surface rents, development project
      contributions, material contributions towards vehicles, buildings or other
      civil works.

            


    

    


     

    The Act
does not provide a Customs Duty exemption on mineral rights holders. The
importation of equipment will be in accordance with provisions of the Customs
Duty Act — which already provides for a substantially reduced rate for equipment
utilised for exploration and mining companies.

    


     

    Government
is given an option to acquire an interest in large-scale mining operations on
such terms that will be mutually agreed between the Government and the licence
holder.

    


    


     

    Miscellaneous

     

    Summary

    The
miscellaneous section of the Act covers a range of issues associated with the
governance of the minerals sector as follows.

    


     

    Holders
of mineral rights shall give preference to Sierra Leonean products, services and
companies.

     

    
 

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    Companies
shall give employment preference to Sierra Leonean citizens; holders of small
and large scale mining licences must undertake a scheme of training to ensure
the advancement of Sierra Leoneans in skilled, technical, supervisory,
administrative and managerial positions Small- and large-scale mining licence
holders are also required to submit annual reports on employment and training,
failure to do so shall be considered material breach of licence.

    


     

    Mineral
samples cannot be removed from the country without the written consent of the
Minister. Failure to do so will be considered an offence.

    


     

    Finders
of precious minerals must deliver the find to the holder of the mineral right or
the Director of Mines; failure to do so will be considered an
offence.

    


     

    A person
in unlawful possession of precious minerals or who carries out smuggling of
precious minerals is guilty of a criminal offence.

    


     

    Unlawful
Possession and Smuggling

    


     

    The
penalty for unlawful possession of a precious mineral is a minimum of 3 years in
prison.

    


     

    The
penalty for smuggling of a precious mineral is a minimum of 5 years in
prison.

     

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

     

    Offences

    


     

    Misrepresentation
of a mineral deposit — fine of not less than $4,000 or a prison term of up to 2
years.

    


     

    Interfering
with the delineation of a mineral right — fine of not less than $2,000 USD or a
prison term of up to 12 months, or both

    


     

    Holder
of large-scale mining licence who fails to notify the Director of any further
deposits — fine of not less than

     

    $10,000
USD.

    


     

    Any
person who interferes with other mineral right holders' activities — fine of not
less than $4,000 USD or a prison term up to 12 months, or both.

    


     

    Any
holder of a mineral right who uses child labour — a fine of not less than $8,000
USD or a prison term of up to 24 months, or both.

    


     

    False
entry into the Mining Cadastre — fine of not less than $2,000 USD or prison term
of up to 6 months, or both.

    


     

    Failure
to deliver documents within 14 days of being called upon to do so — fine of not
less than $2,000 USD or prison term of up to 6 months, or both.

    


     

    General
penalty — fine of not less than $2,000 USD or prison term of up to 12 months, or
both.

    


     

    The
holder of a mineral right shall be liable for an offence committed by an
employee unless it can be proven that the offence was committed without his
knowledge or consent.

    


    


    


    


     

    The Act
also defines the Court as the avenue through which a Minister's decision can be
reviewed.

    


    


     

    Regulations

     

    Summary

    The Act
empowers the Minister to make regulations for the conservation and development
of mines and minerals and for the purpose of giving effect to the provisions of
the Act.

     

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

    Regulations
may address any aspect contained in the law including the
following:

     

    ü    Shape and size of blocks or areas
over which mineral rights may be granted

    ü     The mining
cadastre

    ü    The manner in which areas and
boundaries shall be marked and surveyed

    ü     The renewal, transfer,
assignment and surrender of mineral rights

    ü     The form and
required contents of applications, mineral rights and reports

    ü    The nature of the accounts, books
and plans to be kept by holders of mineral rights

    ü    The valuation, sampling, weighing
and testing of minerals

    ü    The method of calculating the
amount of royalties and the manner and time of payment

    ü    The fees to be paid

    ü    The examination of mines by
authorised officers

    
      	
               
      

            	
              ü

            	
              The
      working of reconnaissance licence areas, exploration licence areas, mining
      areas and mines

            


    

    ü     The avoidance of wasteful
mining practices

    ü    The penalties for offences
against the regulations

    


     

    The
Minister shall, in consultation with the Chairman of the Environmental
Protection Agency, make regulations restricting or prohibiting exploration or
mining operations for environmental

    reasons.

    


    


    


     

    Repeal

     

    The Mines
and Minerals Act 1994 is hereby repealed.

    


    


     

    Any
mineral right or permit granted under prior laws or amendments shall continue to
be valid until its expiry by passage of time.

    


     

    A
holder of a mineral right granted prior to this Act may apply for a mineral
right covering the same area on a priority basis.

     

     

    
      
         

      

      
        34