AIM-listed London Mining has been granted parliamentary approval by Sierra Leone to extract iron ore from mine that closed 35 years ago and which is projected to earn the West African country $5 million dollars this year, Mines Minister Alpha Kanu said on Thursday.
Mr Kanu said " it is projected that by December 2010, the company will export up to 1.5 million tonnes of iron ore and will pay to the country some $5 million" (3.6 million euros). He said this would increase to $10 million by 2011 and to $20 million by 2013.
The British company will re-open the Marampa mine in northern Sierra Leone.
Graeme Hossie, CEO of London Mining plc, said, “Today’s announcement represents a major step forward for London Mining. The cross-party support we received for the incentives package is deeply encouraging for a continuing, long term relationship between London Mining and Sierra Leone. We now look forward to commencing development of the starter operation for the tailings as well as continuing our work on an expanded operation through development of the primary ore to reached a targeted 5-8Mtpa of production by the end of 2013. The Marampa mine exemplifies LM's strategy: using simple and deliverable logistics to reach the market, Marampa is being fast tracked into production to achieve near term cash flow and will then be expanded to significant scale. We are the first mining company in Sierra Leone to have its Mining Agreement approved by Cabinet and ratified by the Sierra Leone parliament under the new mining act and we will be implementing our construction and production plans immediately.”
Mr Kanu also said the government was working on similar agreements with international diamond mining companies in which one percent of turnover would go towards development and corporate social responsibility projects, including environmental protection.
He said that in total these agreements were expected to eventually amount to "a contribution to the national budget of some $300 million."
Sierra Leone is rich in diamonds, gold, bauxite and platinum but in 2009 the whole of the country’s mining industry contributed just $5.5 million to the country’s economy.
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