London Calling cries foul in Guinea

Rio exits Guinea iron-ore blocs, rival in talks

Reuters

23rd July 2009

LONDON - Rio Tinto agreed to remove equipment from two disputed iron ore concessions in Guinea awarded to private firm BSGR, which is seeking partners to develop them, Guinea's mines minister said on Thursday.

Rio, the world's second biggest iron ore producer, said it would comply on Thursday with the order by Guinea, which had threatened to shut down the firm's total operations there.

"Rio Tinto is complying with the ministerial directive and will complete the process of removing the drilling rig today," it said in a statement.

Rio declined to say whether it planned to press on with its fight against the removal of blocs 1 and 2 of the huge Simandou concession, leaving it with blocs 3 and 4.

The row with Guinea comes on top of Rio's confrontation with China over the arrest of four employees on suspicion of spying during iron ore contract negotiations.

Rio said it has spent more than $450-million on exploration at Simandou and considers it the world's largest undeveloped iron ore deposit. It had planned to spend a total of $6-billion to develop the whole concession.

Guinea's Mining Minister Mahmoud Thiam said BSGR, owned by Israeli diamond trader Beny Steinmetz, had asked the ministry to vet potential partners to develop its new concessions.

"We understand they are in advanced talks with them. Whether they develop it alone or with financial or strategic partners... to us it is not really relevant," Thiam told a conference call.

A spokesman for Beny Steinmetz Group Resources (BSGR), which hopes to become one of the world's four biggest iron ore producers, declined to comment about possible partners.

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Guinea hoped that all parties operating in the region would contribute to building the required rail and port infrastructure to cut costs and speed up the development process, Thiam added.

The two concessions were taken away from Rio by the previous government because it did not follow the mining code which required exploration and development of the entire concession, said Thiam, a former vice president of bank UBS in New York.

"I believe that if and when Rio realises that this decision is firm and irreversible, then they'll start concentrating on actually developing the site," he said.

"A company of their stature and size can only be good for a country that has mining ambitions such as Guinea."

A letter Thiam dated June 26 criticised Rio for delays in developing Simandou project and said the global miner was destabilising the West African country.

The company had previously forecast that Simandou's production would begin in 2013 at 8 million tonnes, rising to 70 million tonnes by 2018.

In the conference call, Thiam said his comments in the letter about Rio threatening civil unrest referred to the mining firm's efforts to rally local people to oppose the removal of the two concessions.

He praised Rio for its development work in the region to help build roads, schools and hospitals.

BSGR has been active in Guinea since 2006 and discovered the Zogata iron ore deposit before the government awarded it part of Rio's Simandou concession in December 2008.

The firm hopes to launch production at the Zogata mine in 2012 with 25 million tonnes of output a year and at the Simandou blocs 1 and 2 the following year, eventually ramping up that operation to 100 million tonnes a year.

POSITION PAPER ON KOIDU HOLDINGS' DRAFT RESETTLEMENT ACTION PLAN FOR THE AFFECTED COMMUNITIES IN TANKORO, KONO DISTRICT

CAMPAIGN FOR JUST MINING

C/0 29 Main Motor Road. Brookfields. Freetown. Tel (025) 204036/204035

17 July 2009

PREAMBLE

At a Roundtable Conference of CSOs working around mining and environmental issues held in Freetown on Friday 17 July 2009, and in consultation with the Affected Property Owners Association (APOA) of Kono district, we wish to express our appreciation for the bold step taken by Koidu Holdings Company (KHL) to facilitate and support the development of the long overdue Resettlement Action Plan by their local consultants, CEMMATS.

We are equally aware and appreciative of the efforts of other local structures established after the unfortunate incident of 13 December 2007 that left two people dead and others seriously injured in maintaining peace and cohesiveness in the chiefdom. Specifically, we value the significant role of the Committee for the Re-opening of Koidu Holdings, the Village Resettlement Committee and the Housing and Crop Assessment Team, as well as the leadership role of CEMMATS in all of this.

However, inasmuch as we acknowledge the fact that the draft Resettlement Action Plan makes provision to address some of the sticky issues that have been the source of conflicts and unrest, we are still very much concerned with certain aspects of the Plan. This is because there are some aspects in the Plan that have the potential to not only reverse all the gains that have been made, but also bring about a relapse into serious conflicts in the affected communities.

OUR CONCERNS

Specifically, we the CSOs are concerned over the following issues:

• The proposed "good will compensation to residents of 52 houses" because according to KHL, the owners of these houses could not produce authentic documents to back their claims. We agree with KHL that there are some people who erected houses within the blasting envelope after 2003. But should these people suffer when they went through the legal process to acquire the land and erect their houses? According to the land tenure system and as stated in the EIA Report of 2003, the Paramount Chiefs are the custodians of community land. They entrust the responsibility of distributing it to community people to their section chiefs. This means that whosoever wants to use a piece of land should acquire it from the section chiefs. And the affected people have proved beyond doubt that they went through this process and even acquired legal building permits. Why then should they be made to suffer? Also, these people have made it quite clear that they lost a lot of valuable documents during the war, but there are authorities willing to attest to their ownership of the affected houses. Why is KHL still refusing to give a listening hear to these people?
• According to the RAP, the Village Resettlement Committee (VRC) is presented as the representative of the "community people/project affected persons". This is not the reality on the ground, and we see this as a deliberate ploy by KHL to deny the affected people/communities a face and a voice. The membership of the VRC comprises community people, CEMMATS, KHL, Parliament, Chiefs and the Government of Sierra Leone. It's therefore unfair to the suffering people of Tankoro to say that the VRC is representing their interest, when, in fact, even the Committee is chaired by CEMMATS. The secretary too is from CEMMATS. How then can KHL justify that the VRC is truly representing the interest of the affected people?
• The decision of KHL not to resettle residents of affected houses in Zone 9 and 10 at Yamandu and New Sembehun respectively does not bode well for both the affected communities and CSOs. This is because if KHL go ahead with their plan of fencing their concessions in the said communities with these houses remaining inside the fenced concession, the livelihoods of the people will be seriously undermined. If fully carried out, KHL will violate several basic rights of the people including social, free movement and adequate standard of living.
• KHL have since been the sole manager and supervisor of the construction of houses for the resettlement of affected communities. The product was poor and roundly condemned by everybody, including beneficiaries. The people have also always expressed concern over the failure of KHL to make room for their participation in the process. Despite these concerns, KHL has again given itself the sole responsibility to manage and supervise the construction process (RAP). We fear this might take us back where we are coming from. We further condemn CEMATS providing project Management and supervisory services since they had done all the assessment(crop and housing)

OUR DEMANDS

In the light of the above, we demand the following:

1. On What Koidu Holdings agrees to do in the draft Resettlement Action Plan

• We demand that all houses for the affected communities should be rebuilt with no exception. Furthermore, the affected communities and public must see and validate the separate document that spells out the repair and modification of all houses at new Majamadu I as stated in clause 1 as well as having a blue print agreed by the occupants for the ratification of faults with new houses already occupied at Majamadu 2 site as stated in clause 2.
• We recommend that an independent management team take up the construction of houses, supervised by the VRC and overseen by the Committee for the Reopening of KHL.The selection of the independent management team go through a national biding process overseen by the Committee for the Reopening of KHL.
• The construction of basic amenities should be done along side the construction of houses with priority given to the clinic and the primary school as oppose to clause 7 which states that with exception of the market, all other facilities will be constructed after the houses are completed.
• Clause eight(8) which states that KHL agrees to resettle all people affected in a progressive manner in consonance with the mine plan is in conflict with clause 14 where KHL agrees to provide a schedule of construction of new houses and schedule of resettlement of household that should have the agreement of the VRC.Clause 14 is however preferable and should be carried forward
• Clause 9 conflicts with clause 18, Clause 18, commits KHL to rebuild all community infrastructures that already existed in previous settlements which includes UMC primary, junior and senior secondary school. This indicates that fencing of the UMC School without relocating it is totally unacceptable. Prudence demands that the UMC School be relocated as a safety measure.

2. On what the community people/Project Affected persons (represented by VRC)

• We demand that APOA stands as an independent body and the Chairman signed on their behalf in any agreement and not the VRC whose chairperson is a CEMATS representative. Thus all what the VRC proposed to agree in the draft Resettlement Action should be reviewed to reflect the views of APOA and not the VRC

It is our fervent hope that the above mentioned position would be given the utmost attention and consideration for the benefit of all the stakeholders involve in particular and Sierra Leone as a nation in general

Civil society will continue to monitor the process closely and bring to the attention of the general public and the various structures established on issues that would be of concern and interest.

For more information please contact the following:

Lesli Mboka Suna Bundu Sahr Samuel Ngaujah
National Chairman Program Manager Public Relation Officer
Campaign for Just Mining Mining and Extractives, NMJD A.P.O.A
076-714661/033-752171 033-453073/078-380480 088-904027