CEO of Koidu Holdings
As soon as you
enter Koidu Holdings operations you
can sense a slight change in the atmosphere.
Whilst employment remains one of the principal
challenges facing President Kabbahs
government, in the Kono District, an area
of Sierra Leone renowned for its rich mineral
resources, people are working with a steady
focus, characteristic of the company. As
the only diamond mine currently in production
in Sierra Leone, Koidu Holdings is one of
the countrys most important foreign
investors. The company is planning for the
long-term, and is fully focused on performance.
the CEO of Koidu Holdings explains, We
have established a culture focused on the
need to perform on a daily basis. Every
day we monitor our performance against a
plan and a set of short-term objectives.
Staff and management are very hungry for
a post-war success story in Sierra Leone.
a lot of effort into their work, and that
makes it easier to be successful.
2004, following a 10-month program to reestablish
the plant and infrastructure at the mine,
Koidu Holdings treatment plant was
commissioned and the company began production.
With the build-up program for the K1 pipe
at Koidu hitting record levels in July 2005,
results are beginning to show. In that month
alone, Koidu Holdings produced 10,500 carats
of gem quality diamonds and 2,600 carats
of industrial quality diamonds.
Minister of Mineral Resources, welcomes
the news saying, Koidu Holdings is
reaping the rewards of the management and
its shareholders foresight and their
faith in the governments vision and
the countrys stability. Kimberlite
diamonds represented only 11 percent of
official exports in 2004 and the prospects
for setting up more mines are good. Sierra
Leone has diamond deposits with an average
run-of-mine carat value that competes well
with other diamond producing countries.
officials are especially happy because 40
percent of the companys profits go
to the government in the form of corporation
tax, surface rent, and royalties. It is
this record of performance delivery, of
creating profit for shareholders and the
Government of Sierra Leone alike that has
given rise to a relationship based on mutual
understanding and support.
Plans are being
made to double the company’s investment
with a new mine
elaborates, A vital element of our
success to date is due to the support we
receive from all government officers in
the Ministry of Mineral Resources, the Ministry
of Finance, and the Ministry of Labor. We
do everything in accordance with the relevant
regulations, and the Ministries appreciate
this. They are also eager for us to succeed,
which is why they support us. Without this
support we would not be where we are today.
was one of the first foreign investors to
return to the country after the war was
declared officially over in January 2002.
By June of that year, the team was laying
the groundwork for the establishment of
a mine to exploit the famous Koidu Kimberlite
pipes, and preparing what would eventually
amount to a US$26 million investment. This
was not blind faith, but a judgment based
on an intimate knowledge of the country.
shareholder, the Beny Steinmetz Group Resources
Limited (BSGR) together with the minority
shareholder Energem Resources Inc, a natural
resources company listed on the Toronto
Stock Exchange, have been committed to Africa
for many years. Recognizing that the Koidu
Kimberlite Project was able to offer unique
opportunities, they formed Koidu Holdings
S.A. It is the combined operational expertise,
technical, and financial capacities of the
shareholders that form the final ingredient
in Koidus success. For instance, BSGR
was able to draw on one of its affiliates,
Bateman Engineering B.V., to provide the
processing and recovery plant for the mine.
Bateman Engineering B.V. is a leading, AIM-listed
engineering company, and one of the leading
solutions providers to the diamond industry
in Africa and the Russian Federation.
rewards for the foresight and faith they
had in the governments vision and
in the countrys stability are just
beginning. With its winder and head frame
only commissioned in October 2005, the step
up in production wont see the Koidu
mine hit full production volume until the
beginning of 2006. There are also plans
in place to double the companys investment
by developing another mine after it recently
beat out competition from ten other international
companies to win the concession for Sierra
Leones Tongo Fields.
Commenting on the tender process, Vice President
Solomon Berewa states, Koidu Holdings
commitment to a rapid evaluation of the
Tongo Diamond Field, the experience of their
staff in appropriate mining methods and
technology, and the work the company has
already done in bringing the Koidu pipes
into production was considered in the evaluation
of the bids. We reached a unanimous decision.
The best company wonon its merits,
and only on its merits.
|Production got under way early in
January 2004, following a 10-month program
to reestablish the plant and its infrastructure.
As the only
operational diamond mine in Sierra Leone,
Koidu Holdings could demonstrate what no
one else couldpractical evidence of
operational ability. And whilst there is
often criticism about weak governance
and corrupt regimes, the transparent
way in which this tender process was conducted
inspires confidence and is encouraging for
foreign investors. And, of course, it also
means that Sierra Leone will optimize the
benefits for its own people.
Mr. Joubert adds, If we look at the
historical and geological information, we
see that there are very good indications
with respect to the grade and size distribution
of the diamonds that could be found in Tongo.
From a technical point of view, we believe
we have the capacity to prove whether it
is feasible or not within a reasonably short
just be the beginning. BSGR also has interests
in the minerals and metals sectors. Using
the success of its Koidu operations as a
springboard, BSGR is now looking at additional
investment opportunities in the country
and the West African region, motivated in
part by the relationships formed with the
government and people of Sierra Leone. Indeed,
creating a consensus with the local people
also formed a major part in the success
of their bid. Although the government owns
Sierra Leones mineral resources, the
local Paramount Chiefs own the land. Knowing
this, the company became the first to go
to the people of Tongo and seek their consent.
They explained what they had achieved in
Kono and what they would like to achieve
in Tongo if given the opportunity.
approach had already come into play in Koidu
when, in February 2004, some NGOs and civil
society groups expressed concern about environmental
damage caused by the mining operations.
Peace Diamond Alliance convened a meeting
of its executives whose attendees included
representatives of the Ministry of Mineral
Resources, parliamentarians, Chiefs, and
the personnel of Koidu Holdings, who sought
to resolve the issues and concerns raised.
Subsequently, in order to keep all stakeholders
happy, Koidu Holdings stepped up its relocation
program for local residents and made the
decision to switch to a vertical rather
than a conventional open pit. President
Kabbah went to Kono a few days after the
meeting, calling it a job well done
and urging the people of Kono to cooperate
with Koidu Holdings.
the streets of Koidu, the evidence of years
of civil unrest is plain to see. Koidu was
a rebel stronghold for years and the burnt
out interiors of buildings are visible through
the missing windows and roofs; however,
there is a renewed sense of optimism. Immediately
after the war it was a ghost town, but the
bustle of people and trade is returning.
Newly painted buildings with reconstructed
roofs are springing up amidst the devastation.
There is no
doubt that this renaissance is due in large
part to Koidu Holdings. The company employs
around 400 Sierra Leoneans of whom 80 percent
are from the local community. With an average
wage of US$350 a month, Koidu Holdings is
the highest salary payer in Sierra Leone
by a noticeable margin. Assuming, as is
often the case, that each worker is supporting
ten people, then its operations impact almost
4,000 people directly. Indirectly, the business
opportunities generated by its presence
mean that the mine is benefiting thousands
more. Needless to say, it is difficult to
find anyone who is critical of the company.
If Koidu Holdings
can bring the Tongo Fields project on line
it will be great news for the country. With
his fierce commitment to the country, its
people and the shareholders, Jan Joubert
is determined to make it a reality.
is no doubt that Africa is the future in
terms of resources and, having worked in
many African countries, my passion is Sierra
Leone. We are not an NGO, we are here to
make money, but we are also committed to
the country. There
is a lot of potential here, it is only a
question of studying the opportunities well
and then committing yourself to making things
been here since 1995, I saw it in 2002,
and now, almost four years after the war,
it seems like a different world. People
have hope and are more positive. Obviously,
there is still a lot to be done in Sierra
Leone in terms of development and education,
and in terms of industry and investment
to create jobs, but due to my understanding
of Sierra Leone and its people, I feel a
moral obligation to make sure that Koidu