Sierra Rutile pulls the trigger on plans to cull hundreds of workers and suspend mining amid government stoush

In a game of chicken with Sierra Leone’s government Iluka Resources spinout Sierra Rutile is moving forward with a plan to sack hundreds of workers and stop activity at its only operational mine. Sierra Rutile confirmed on Monday it suspended all mining and processing activities at its Area 1 operations and will make approximately a quarter of its workers, including expatriate staff, redundant by the end of this month. As of August last year the miner employed 2200 people, with the vast majority at Area 1. The company says it is one of the largest private employers in the West African country. Sierra Rutile announced the mining suspension and worker redundancy plan in January after Sierra Leone’s government pulled the pin on an existing agreement that would likely result in “significantly” higher royalties and taxes. The two parties are currently in legal negotiations and Sierra Rutile on Monday warned it would have to cut the majority of its remaining workforce if a deal could not be thrashed out. “Sierra Rutile is hopeful that the suspension of operations will be brief and that an agreement can be reached with the government of Sierra Leone on an appropriate fiscal regime that would again support production alongside supportive rutile market conditions,” the company said. “Should this not be achieved in the coming weeks, Sierra Rutile will need to consider the full closure of mining operations at Area 1 which would impact the great majority of the remaining workforce as well as, potentially, a large number of personnel employed by various contractors.” The company has also been stung by a weakening market for its key commodity — rutile — which is a feedstock in titanium production. It is the largest supplier of natural rutile in the world and slumped to a $20.1 million loss for 2023. After being demerged from Iluka Resources in July 2022 Sierra Rutile has endured a tough life on the market, shedding about three-quarters of its value since listing.