West Africa Mining
It has been a long court battle for West Africa Mining to secure a land lease in the south east Bagla Hills region of Sierra Leone. Now that the battle is won, chairman Steve Cosser is speaking out about his experience and the story is more than just a cautionary tale.
Bagla Hills is a classic African story illustrating the cognitive dissonance between vast wealth in the ground and tremendous poverty of those living on it, says Steve Cosser. Close to the Liberian border, it is the poorest part of one of the poorest countries in the world with a recent, tragic history of conflict.
The country is now a constitutional democracy with a population of 5.5 million, widespread unemployment, vast untapped mineral wealth and a mining ban in Bagla Hills. According to government estimates, there is 3.2 billion tonnes of iron ore and analysts say that the economy could grow by 50 per cent annually if it is developed.
“We will prove at some point that we have masses of gold, iron ore, diamonds, bauxite…there is also a railroad nearby which goes to Liberia and Port of Salima 33 km away,” Cosser adds.
A historic SRK mineral inventory estimated 838.7Mt of iron ore at 32.5 per cent iron content and 22.5 per cent magnetite with the majority of the tonnage found in the south of the property. Preliminary pit optimisation studies report a 776Mt of iron formation at a grade of 32.2 per cent iron content and 22 per cent magnetite. In total, 289Mt of pellets could be produced at an assumed grade of 65 per cent iron.
Leases and laws
But West Africa Mining’s journey to secure a land lease in preparation for the mining ban to be lifted has had its share of complications.
In 2010, Cosser signed a lease and announced plans to develop an iron ore mine as well as begin a comprehensive social programme to build schools, housing, hospitals and other basic civil infrastructures.
“I signed quite legitimately, with one of the best lawyers in Sierra Leone, the lease with the Paramount Chief, what I thought were official signatories even put thumbprints on it. We thought we were in the clear,” he says. “And then came along Sable Mining.”
In April 2011, AIM-listed Sable Mining announced in an RNS that the company acquired a Bagla Hills iron ore project. Sable directors include Philip Edmonds, a Zambian national and former England cricketer, and Zimbabwean Andrew Groves - a duo with a reputation in the mining industry.
When you go to Steve Cosser’s “We Love Bagla” website, intended to be read by people who live where West Africa Mining will be operating, and click on the “Sable – Edmonds, Groves & Associates” link, what appears is a picture of a shirt-sleeved hand with locking cuffs around it attached to an American dollar.
“They made a fraudulent claim, claim jumping is nothing new in the mining industry mind you, but they did go very public with it. Shortly after, the Sierra
Leonean government announced that nobody had a mining licence in Bagla Hills, that Sable’s claim was a sham,” says Cosser.
In order to remove both issued land leases from the registry, Cosser had to take a circuitous route and convinced the rightful signatories to sue all of the people that were party to both leases, including himself.
The Paramount Chief, who is a kind of district Member of Parliament, explains Cosser, is merely the custodian of the land. It is actually owned by 23 families, who have had ownership rights for hundreds of years. The new lease, owned by Cosser since May this year, is now signed by the heads of all 23 families.
In addition, he is building ties to the three major political parties in advance of an election this November. He hopes that this will help ensure there is political support for his ownership of a mining licence if the ban is lifted.
The philanthropic element, however, is not tied to receiving a mining licence. Cosser has promised to initiate social programmes and infrastructure development whether or not mining goes ahead, including a scholarship for students at a local high school to build technical skills and pave the way for future employment.
One of the other problems facing Cosser is that the development property is located at the edge of a conservation area. If a mining licence is granted, he points out that operations will impact less than one per cent of the newly created Gola National Park. The conservation area is the subject of much debate between the mining and forestry sectors and could attract the attention of NGOs.
The conservation order stopped China Investment Corporation (CIC) from further work in the area and their exploration licence was revoked after they performed reconnaissance work.
Cosser explains that the specific area in question has no wildlife or vegetation in need of protecting and furthermore, has already been impacted by work carried out in the 1970s by the now bankrupt US-based Bethlehem Steel. But decisions over who can mine, and where, are changing in Sierra Leone. Cosser points out that the new mining law has handed greater authority to landowners who can now stop people from mining on their land - a power that used to be under federal control.
“There is a famous saying from Lang Hancock, a fellow Australian entrepreneur, that the problem with iron ore is that it is heavy and is always in the wrong place and it is true that quite large deposits exist in places like the mountains of Utah which would be uneconomical to export. But this vast deposit of mineral wealth in Sierra Leone – which is the size of Northern Ireland, is propitiously located near the ocean and existing tracks. I believe that I have the right solution for development - you have to smash commercial forces and philanthropic requirements together. There will be no philanthropy without money and there will be no money without business,” he says.
Whatever the risks or challenges, he expects to meet them head on by building local community support and moving forward on development. SRK Consulting is tasked with getting the deposit to JORC compliance, Credit Suisse has been approached to deal with supply chain logistics and West Africa Mining is planning to float on AIM this year, Cosser adds.