Author Topic: Cablegate: China Influence Increasing In Sierra Leone (2007)  (Read 1762 times)

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Cablegate: China Influence Increasing In Sierra Leone (2007)
« on: November 15, 2013, 14:50:57 PM »
China Influence Increasing In Sierra Leone
OriginEmbassy Freetown (Sierra Leone)
Cable timeMon, 5 Mar 2007 19:23 UTC
ClassificationCONFIDENTIAL
Sourcehttp://wikileaks.org/cable/2007/03/07FREETOWN153.html

C O N F I D E N T I A L SECTION 01 OF 02 FREETOWN 000153
 
SIPDIS
 
SIPDIS
 
DEPT FOR AF/W, AF/RSA (DANIEL EPSTEIN)
 
E.O. 12958: DECL: 03/05/2017
TAGS: PREL PGOV ETRD EFIN ENRG CH ECON SL
SUBJECT: CHINA INFLUENCE INCREASING IN SIERRA LEONE
 
REF: STATE 2758 STATE 34937
 
SUMMARY
-------
 
¶1.  (C)  China continues to expand its presence and influence
in Sierra Leone as it looks to exploit the country's vast
mineral wealth and fishing resources. Sierra Leone and China
have enjoyed diplomatic relations since 1971. GOSL officials
traveled to China last year for the China-Africa Summit and
signed a MOU on economic cooperation with the Chinese
government. In the mining sector, the Government has invited
Chinese mining teams to conduct a comprehensive mineral
survey in Sierra Leone. The Government has frozen or
rescinded current mining concessions in Sierra Leone and is
using these concessions as collateral for Chinese financing
of major power sector projects. A company with an American
interest is protesting the Government's decision to not renew
one of its mining concession licenses. The Chinese have
provided assistance for a number of infrastructure projects
including building or refurbishing the Parliament building,
national stadium, the Military and Police Head Quarters, the
Youyi building that houses more than three quarters of the
government ministries, bridges, and a sugar complex. The
Chinese also plan to build the new Foreign Ministry building
next year that will be located near the recently completed
U.S. Embassy and a new sports stadium in Bo. China also
provides scholarships for Sierra Leonean students to study in
China. END SUMMARY
 
MOU ON ECONOMIC COOPERATION GIVES CHINA GREATER ACCESS
--------------------------------------------- ---------
 
¶2.  (SBU) The GOSL is looking increasingly to China for
much-needed financial assistance. President Kabbah traveled
to China last year for the China-Africa Summit and met
separately with Chinese President Jintao to discuss how to
further bilateral cooperation. President Kabbah signed a MOU
with the Chinese pledging expanded economic cooperation and
has invited the Chinese to conduct a comprehensive mineral
survey in Sierra Leone. Chinese officials have visited Sierra
Leone to collect soil samples for analysis for the
preliminary stages of the survey, and more teams are expected
later this year. Chinese officials have also visited to
explore possibilities for creating export zones.
 
CHINESE TO PROVIDE ASSISTANCE FOR HYDROPOWER
PROJECTS IN EXCHANGE FOR MINING CONCESSIONS
--------------------------------------------
 
¶3.  (C) As a result of the decade-long civil war that ended
in 2002 and overall poor governance, infrastructure
challenges continue to plague Sierra Leone. Having failed to
secure international financing from the World Bank and other
international financial institutions, the Office of the
President issued a directive freezing renewals and issuance
of new mining concession licenses and has begun a review of
all current licenses to determine if companies are operating
at an "effective" level. The Government has seized
concessions it feels have not been operated effectively and
is using these concessions as collateral for Chinese
financing to complete the long-overdue Dodo and Benkorkor
hydro electric projects in the Kenema district in the
southeast part of the country. The Chinese originally built
the Dodo hydro electric plant in the 1980s and plan to
upgrade its capacity from two to six megawatts.
 
¶4.  (C) According to a Ministry of Mineral Resources
official, President Kabbah has selected the Benkorkor hydro
electric project as his legacy project. Projected as
potentially the largest hydro electric project in Sierra
Leone, the Siaka Stevens government in the 1970s opted to
fund the less costly Bumbuna hydro power project. Benkorkor's
original cost was projected at $400 million. The Chinese have
proposed to build Benkorkor for $150 million over three years
with a five-year recovery plan. The ministry official said
the Chinese are more interested in industrial minerals than
gold or diamonds.
 
GONDWANA INVESTMENTS CRIES FOUL
-------------------------------
 
¶5.  (C) The Government's decision to freeze all renewals and
new mining licenses has negatively impacted Gondwana
Investments S.A. Gondwana is a privately-owned investment and
mineral exploration company with American shareholders,
including former AF Assistant Secretary of State Kansteiner,
who is chairman of the board. It is based in Luxembourg and
has operated in Sierra Leone for more than ten years. It is
protesting the Government's January decision to deny its
 
FREETOWN 00000153  002 OF 002

application for renewal of an exploration license at Port
Loko in the Northern Province. Gondwana argues that the
Government violated the law by denying the renewal and
reportedly plans to sue the Government for breach of
contract.
 
FISHING
-------
 
¶6.  (U) Chinese fishing vessels fish regularly in Sierra
Leone territorial waters and there are fishing contracts
between Sierra Leonean and Chinese companies including the
Fujian-Africa Fishing Company of China and the Company of
International Cooperation on Agriculture, Husbandry and
Fishery of China.
 
CHINA GOODS
-----------
 
¶7.  (U) China's exports to Sierra Leone include mechanical
and electrical products, textiles and other light industrial
goods, cultural and educational materials, hardware, and
articles for daily use. China's main imports from Sierra
Leone are coffee and cocoa beans. Figures for 2006 were
unavailable. The trade volume between the two countries in
2002 was $14.57 million, but has increase significantly since
then. China is now Sierra Leone's third largest trading
partner.
 
CULTURAL EXCHANGE
-----------------
 
¶8.  (U) Sierra Leone and China signed a cultural agreement in
April 1981. China began to accept Sierra Leonean students in
1976 and had received over 250 students from Sierra Leone.
China also has sent medical teams to Sierra Leone and began
to re-deploy medical personnel following the end of the
decade-long civil war in 2002.
 
MILITARY EXCHANGE
-----------------
 
¶9.  (U) The Chinese have provided considerable military
training to the Republic of Sierra Leone Armed Forces (RSLAF)
and have sent a number of Sierra Leonean soldiers to China
for training. China also donated a patrol boat to the RSLAF
navy in 2005.  The Chinese have encouraged the GOSL to crack
down on Guinean pirates who attack and raid Chinese fishing
vessels in Sierra Leonean territorial waters.
 
TELECOMMUNICATIONS
------------------
 
¶10.  (U) China recently announced that it will provide a
$16.5 million loan for Sierratel, the state-owned
telecommunication operator, to improve rural landline
service. The contract will go to a Chinese company.
 
US/CHINA COOPERATION
--------------------
 
¶11.  (U) Post maintains normal diplomatic relations with the
Chinese mission, but does not have any areas of direct
collaboration.
 
COMMENT
-------
 
¶12.  (C) The Chinese have a solid foothold in Sierra Leone,
which appears will only be strengthened as the Government
looks for ways to become less reliant on foreign assistance
that comes with conditionalities. Chinese assistance is
desirable for this very reason, and there remains
considerable concern that the Government appears willing to
quickly incur new debt even after having recently achieved
significant debt relief from the Paris Club. END COMMENT.
HULL

Full cable: http://wikileaks.org/cable/2007/03/07FREETOWN153.html