FREETOWN (Reuters) - SL Mining, a subsidiary of U.S. commodity trader Gerald Group, will suspend iron ore mining operations in Sierra Leone over a dispute with the government about royalty payments, a company letter seen by Reuters showed on Friday.
SL Mining filed for arbitration last month in an international court against Sierra Leone’s government after authorities imposed a ban in July on exports from the company’s Marampa mine.
The government says the company has failed to maintain the mine’s agreed work schedule or make royalty payments. SL Mining denies the accusation.
A Gerald Group spokeswoman declined to comment on the letter itself, which was sent to mine staff on Thursday.
The spokeswoman said: “The company is disappointed and concerned that the government appears unwilling at present to seriously engage or commit to any process with a view to resolving the unlawful and indefinite export ban.”
Sources within Gerald Group said the mine would suspend operations as early as next week, and that nearly 1,000 local employees would be placed on leave.
SL Mining estimates that Marampa holds about 1 billion tonnes of iron ore with a potential lifespan of 30 years.
Reporting by Cooper Inveen and Pratima Desai, writing by Anna Pujol-Mazzini, editing by Aaron Ross and David Evans