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Sierra Leone Business: Shandong Steel hit by financial hardship

The management of Shandong Iron and Steel Group Co Ltd has revealed to their contractors and employees in a leaked email on Friday 3rd November 2017 that the company is going through a “tough financial period.”
The email, which was initiated by the Chief Operating Officer (COO), Scott Lousich, of Shandong Steel Sierra Leone, sub-titled, “Site notice,” confirmed to employees and contractors the current position of the company and their moves to suspend contracts of contractors for a minimum of 35 days.
The leaked email from SD Steel highlighted that, “The iron ore price remains very low and with rising shipping costs, SDS is losing money.” The notice went on to state that, “Unfortunately, SDS has to take further steps due to these ‘financial hardship’ and SDS has made the decision to suspend load and haul mining and drilling and blasting operations for a minimum of 35 days.”
It could be recalled that in April 2015, China’s Shandong Iron and Steel acquired 75% stake in the Tonkolili iron ore mine for over $170 million from African Minerals (AML), confirming their 100% ownership of the equity and associated infrastructure, company Port and Railway services.
The Jinan based steel company in 2015 was ranked 12th biggest steel producer of the world with a production of 21.7 million tons of steel.
The buy-over news was on Monday 20th April 2015, confirmed in a press release by African Minerals on their website, in which they expressed frustrations on the circumstances under which Shandong acquired AML.
The AML release however cautioned that, “The administrators are continuing to ‘investigate’ the ‘circumstances’ of the sale with a view to ensuring that AML’s interest has been dealt with properly according to the law.”
The Shandong site notice to contractors and employees stated that during the suspension period the company will also improve on their efficiency and reduce cost with the aim of optimizing mine plant 1Bto ensure reliability improvement as they finalize plans for 2018. Scott also revealed in the leaked email that SD Steel is suspending portions of BCM contract to enable the company develop sustainably and steadily in the near future.
The Project Manager for the Ghanaian owned BCM group in Sierra Leone James Bent reportedly wrote to their Accra office informing them of the suspension of portions of their contract with SDS at the Tonkolili mines in Sierra Leone. The BCM mining and civil contractors in their letter titled, “Suspension of BCM Works by TIO,” on 3rd November 2017confirmed that, “BCM received instruction from TIO that pursuant to the contract terms, TIO is temporarily suspending all BCM’s Load & Haul and Drill and Blast work on the mine for a period of at least 35 days.”
The head of media for the Shandong Iron and Steel Group Co Ltd was contacted on Friday17th November 2017, via SMS message and calls through his personal mobile numbers but was unavailable to make any response on the company’s position regarding the information.
However the one month and 5 days suspension of portions of BCM’s contract is expected to end on Friday 8th December 2017.
By Mohamed Kabba
Twitter: @chikakabba
Monday November 20, 2017.

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