VZCZCXRO5974
PP RUEHPA
DE RUEHFN #0153/01 0641923
ZNY CCCCC ZZH
P 051923Z MAR 07
FM AMEMBASSY FREETOWN
TO RUEHC/SECSTATE WASHDC PRIORITY 0851
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0040

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 
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¶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rescinded current mining concessions in Sierra Leone and is 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