The government of Sierra Leone has directed mining company Sierra Rutile to restart mining operations in Area 1 by the end of May. This directive comes after Sierra Rutile suspended activities in January due to a dispute over taxes.
The government views the suspension as a violation of the Mines and Minerals Development Act and has given the company until May 31st to comply. Sierra Rutile, however, disagrees with this stance and is currently evaluating its options in response to the government’s order.
The disagreement stems from ongoing negotiations regarding a new tax regime for Area 1. In May 2023, both parties began discussions for a “third amendment agreement” that would define the fiscal terms. However, negotiations stalled in January when the government decided to abandon the proposed agreement, reverting Sierra Rutile to the tax regime established in 2001.
The mining company argues that the older tax structure makes continued operations in Area 1 economically unsustainable. It remains to be seen whether Sierra Rutile will comply with the government’s order or take further action to defend its position.
