AFRICA-FINANCE: World Bank Ponders Loan to Sierra Leone mine

By Pratap Chatterjee Reprint | | Print |

Pratap Chatterjee

SAN FRANCISCO, Aug 15 1997 (IPS) - The private sector arm of the World bank, the International Finance Corporation (IFC), is considering a 17.3 million dollar loan for the operators of the world’s largest rutile (titanium dioxide) mine situated in Sierra Leone.

Sierra Rutile, the Ohio-based operators of the mine, owes several international banks about 20 million dollars in previous loans and has been unable to make repayments since the mine shut down in Jan. 1992 after a military coup in the West African nation. The banks include the World Bank, the London-based Commonwealth Development Corporation and two U.S. federal agencies – the Export-Import Bank and the Overseas Private Investment Corporation.

In the five-year civil war that followed, Sierra Rutile’s name was linked with other business concerns that financed two South African-led mercenary operations in Sierra Leone which helped to a return to civilian rule. Trouble returned, however, in May this year when the military again overthrew the elected government.

At the end of July, West African peace negotiators broke off talks with the ruling junta after it refused to hand over power and declared it would rule Sierra Leone for the next four years. This has sparked reports in financial circles of another mercenary intervention if the United Nations fails in its efforts to restore the elected government.

An IFC investment officer refused to discuss with reporters the possible use of mercenaries in Sierra Leone and a spokesman for Sierra Rutile said the company did not work with “armies for hire.”

Newspapers have reported however that Tim Spicer of the mercenary concern Sandline International met with investors in Vancouver, Canada, to discuss “strategy, logistics and training” to “convert 40,000 militia troops into an effective fighting force” in Sierra Leone.

Sandline is controlled by minerals speculators Robert Friedland and Anthony Buckingham, the two principal investors in Diamond Works, a mining company with extensive interests in Sierra Leone, who were also instrumental in the 1995 mercenary interventions there.

The first operation in early 1995 involved a company called Gurkha Security Guards led by Robert MacKenzie, the son-in-law of former CIA assistant director Ray Cline. Unfortunately MacKenzie was killed in an ambush and the Gurkhas refused to take offensive action, which was forbidden under their contract.

In April 1995 Sierra Rutile teamed up with the British company Branch Energy, which is now controlled by Diamond Works, to bring in South African mercenaries run by the firm Executive Outcomes. They had the blessing of Gen. Valentine Strasser, the then ruler of Sierra Leone, whose military government itself was being harried by rebellious troops.

In return, the mercenaries reportedly were guaranteed 1.5 million dollars a month in profits from diamond mines in Kono, the eastern part of the country, near the border with Guinea.

Executive Outcomes employed Sierra Leonean hunters as scouts and brought in two of South Africa’s most highly decorated air force pilots. The airmen initially had difficulty distinguishing between the rebels and civilians camped under the impenetrable canopy of vines and trees. But when the Sierra Leone military commander told them to “kill everybody” they obeyed orders – according to accounts of the operation published in Harper’s magazine.

After Strasser quit to allow the return of civilian rule, the new authorities terminated the Executive Outcomes contract under pressure from the International Monetary Fund. Then came the latest coup.

The human rights situation has continued to deteriorate in Sierra Leone with dozens of reports of robberies and summary executions last month. The World Food Programme has alleged that the army has started “systematic and violent looting of relief food.”

In the meantime Sierra Rutile has been struggling to raise new money to re-open its mine. Last year the company raised 10 million dollars in new funds from Jean-Raymond Boulle after he made 800 million dollars selling indigenous lands in Voisey’s Bay, Canada, to Inco, the nickel multinational.

Boulle, a Mauritian who used to work for De Beers, is very active in Africa. He has mining contracts with mercenaries in Angola as well as a billion dollar mining contract with Laurent Kabila, the new ruler of the Democratic Republic of the Congo, former Zaire.

This year Sierra Rutile is hoping to get more cash from the World Bank for a proposal that ostensibly seeks to expand capacity at the rutile mine from 150,000 tonnes per day to 220,000 tonnes per day. The loan proposal, however, has been condemned by Friends of the Earth US which says that the company has violated Bank resettlement and environmental guidelines.

Still, World bank officials remained upbeat about the proposal. “It’s a wonderful rutile deposit and it has good sponsorship,” IFC investment officer Navied Burney told IPS. He refused to comment on Lifeguard, the Executive Outcomes subsidiary in Sierra Leone.

A Sierra Rutile official, who asked not to be identified, said that the company did not work with mercenaries but would be happy to work with any new government. “If the rebels win and become the recognised government then we will probably deal with them,” he told IPS.

The fortunes of Spicer and Sandline, meanwhile, have waned. In April, Spicer was taken to court in Papua New Guinea (PNG) after a failed attempt to oust a small group of freedom fighters, who have shut down a copper mine on the island of Bougainville for almost a decade.

Sandline’s PNG operation failed after local people and army officers took the law into their own hands to protest the arrival of foreign troops forcing the government of Sir Julius Chan to resign amid riots which had police firing tear gas and rubber bullets to disperse demonstrators.