By Mabinty M. Kamara
The future of Sierra Rutile Mining Company hangs in the balance as the company continues negotiations with the government of Sierra Leone to resolve tax issues, missing its own proposed date of resumption originally set at April 11, 2024.
An email sent by the company’s Human Resource Officer Barry Honnah to staff and widely shared on social media announces “an extension of our temporary suspension until further notice”. Many industry watchers have described this as a euphemistic way of saying the suspension is indefinite.
Meanwhile, shareholders of the company have poured cold water on what they described as an “unsolicited takeover offer” from a company called PRM Services trading on the Australian Stock Exchange “to acquire all the Sierra Rutile shares it does not own”.
On March 20, 2024, Craig Dean, CEO of PRM Services issued a statement announcing his bid for all shares in Rutile saying that “the offer represents attractive value to SRX Shareholders, particularly given the current risks and uncertainties associated with remaining an SRX Shareholder in the face of prevailing risks including…reducing global demand for rutile, sovereign, political and operational risk with operating in Sierra Leone and…the ability to secure finance for SRX developments on acceptable terms”.
Dean who already owns Marampa Mines, operating out of Lunsar in the north of Sierra Leone, argues that his “proposed acquisition of SRX is in line with PRM’s strategy to invest in and develop projects that will become a viable and profitable operating company with the correct guidance, strategy, and resources deployed, the right strategic partners in Africa and local experience”.
The chairman of the bauxite miner Greg Martin said in a preliminary response to the PRM Services bid that “we have formed the view that the offer is opportunistic, inadequate and undervalues the company…”
The statement says “Shareholders should wait to receive further information from Sierra Rutile’s Directors in relation to the offer”.
Mines minister Julius Mattai told a news conference in Freetown that the situation regarding the proposal to take over Sierra Rutile remains a business-to-business affair at the moment. He said after business deals on the stock exchange outside Sierra Leone, the owners would have to meet their obligations to register in Sierra Leone and his ministry would ensure that they comply with the laws of Sierra Leone.
Sierra Rutile directly employs approximately three thousand five hundred workers who stand to lose their jobs should the company close down operations. It also has over five thousand indirect jobs including local contractors. Community development projects are also on the line.
Copyright (c) Politico Online (05/04/24)
