The merger between mineral sands resources companies Sierra Rutile and Iluka demonstrates that Sierra Leone is open for business and able to attract investment from high-profile multinational companies that are keen to participate in the development and growth of the country, says former Sierra Rutile CEO John Sisay.

Iluka has, through the merger, assumed the net debt, about $59-million, of Sierra Rutile, which will operate as a wholly owned subsidiary of Iluka.

The merger is posited to represent an exciting phase of development for Sierra Rutile and Iluka, which expects to invest about $60-million over the next two years to expand on recent improvements to Sierra Rutile’s operations.

Sisay believes the merger, completed in December at a cost of A$393-million, will ensure that the operations in Sierra Leone are optimised to their fullest potential, adding that Iluka is a financially strong, established operator in the mineral sands sector, with a successful record that ensures it is well placed to continue the development of Sierra Rutile’s long-life assets.

Iluka plans to progress detailed feasibility studies for a number of mine development and expansion options that should see a significant increase in rutile output. Expansion decisions will be dependent on the outcome of feasibility studies and market conditions, with consideration to other options, all in Sierra Leone, within the Iluka portfolio.

These expansion opportunities include the Lanti dry mining operation, where the current planned expansion targets an additional 250 t/h of ore throughput. Iluka is considering a larger expansion of 500 t/h.

At Gangama dry mining, the current planned expansion is for an additional 250 t/h throughput, but Iluka is again considering a larger expansion of 500 t/h. The final expansion opportunity noted by the companies deals with Sembehun dry mining, specifically the development of a new group of deposits with 1 000 t/h throughput.

“One of my key areas of focus will be on ensuring the continuity of operations and building positive, mutually beneficial relationships with the government of the Republic of Sierra Leone and its main agencies, with regional and community representatives and other key bodies within the country,” explains newly appointed Sierra Rutile CEO Rob Hattingh, emphasising that Iluka and Sierra Rutile will work closely together to continue to strengthen Sierra Rutile’s position as a leading global rutile producer.

He further notes that the initial priorities of the Iluka and Sierra Rutile management will focus on operational, safety and other enhancements. “The experience and skills of Sierra Rutile’s employees will be a key factor in the success of the integration and operational growth,” Hattingh says.

Iluka MD and CEO Tom O’Leary emphasises that the combination of Sierra Rutile employees’ experience and skills with Iluka Resources’ operational and technical experience gained across multiple orebodies and processing facilities over many years, will enhance the operational performance of Sierra Rutile.

He says the resilience and growth of the company, a major employer within Sierra Leone, as well as a major role-player in both national and regional economies, is testament to the dedication and capabilities of its employees.

Sisay resigned from Sierra Rutile following the completion of the merger but agreed to assist with the transition and start the integration process.

“He has had a formative influence on the development of the operation since 2001, including the company’s continued operation and community aid during the Ebola crisis, with record rutile production in 2015 [of 126 000 t] and the successful commissioning of the Gangama dry mine in May 2016,” O’Leary says.

Sisay foresees that Sierra Rutile’s management and employees will reap benefits from Iluka’s future investment in the company and wider career development opportunities.