Freetown’s Quay: How Sierra Leone Monetized the Shoreline

Zach Martin

Welcome to Ocean Capital Desk, an IRHUB Media and KMKT original. I'm Zach Martin, and this is The Invisible Economy, the series about the country you don't see. As always, nothing we say here is investment advice. We're here to explain how things work, not to tell you what to buy.

Emily Martin

And I'm Emily Martin. Zach, last time we spent an hour treating the ocean like a balance sheet. Exclusive economic zone rights, fisheries, the legal claims under UNCLOS, and the cash flows that hang off them. Sierra Leone was our case. And one point kept coming back. A fishing licence in the water is worth much less if the catch never has to touch your land. Article 62 lets a coastal state require that catches be landed, but landing a catch takes a quay, cold storage, and people who can handle cargo. Without those, the value is captured by whoever owns the equipment, and that is often a foreign operator.

Zach Martin

Right, so today we walk out of the water and onto the quay wall. I want to start with a date and a number, because they make the point. Construction of Queen Elizabeth II Quay in Freetown began in 1953, on what used to be called Fourah Bay. It took seven years, and it was opened in 1960 by Queen Elizabeth II herself. According to the Logistics Cluster's port profile, the quay today runs 1,067 meters across six berths. A different section of that same profile adds up the berth lengths to 1,113 meters, so even the public descriptions don't perfectly agree. Either way, picture roughly a kilometer of concrete edge.

Emily Martin

And that kilometer is the thing I'd like listeners to hold onto. The profile calls Freetown the principal commercial port in Sierra Leone and the most important entry gate for trade and commerce. Think about what that means physically. Everything that arrives by sea and has to be put on land, or goes from land onto a ship, passes over a short stretch of water's edge. Not through the open water, which is vast, and not through the interior, which is large. Through a narrow line. It's like a stadium. The stadium is huge and the city around it is huge, but everybody squeezes through a few gates, and those gates set the pace of the whole evening.

Zach Martin

That's the coaching point for the whole episode. Where is the gate, and who holds the key? And the law backs up how seriously a state should treat that question. Under UNCLOS Part II, Article 11, permanent harbour works that form an integral part of a harbour system are treated as part of the coast. So the quay, the breakwater, the jetty, these aren't out in some contested zone. They sit inside territorial sovereignty, where the coastal state has full authority.

Emily Martin

Which sets up the paradox we want to unpack. Legal sovereignty over a port is about as complete as sovereignty gets. Yet the money to dredge a channel, rebuild a quay wall, and buy gantry cranes is the kind of money that many developing countries can't easily raise on their own sovereign credit. So the state does something that is either clever or risky, depending on who you ask. It keeps the land and the seabed, and it leases the right to operate on them for twenty, thirty years. At that moment a stretch of shoreline stops being only geography. It becomes a financial asset with a term, a cash flow, and a counterparty.

Zach Martin

Let me be careful about how we split this up, because the episode has two layers. The facts are the contracts, the dates, the dollar figures where they're public. The reading, that a long lease turns shoreline access into investable power, is our framework. It's an interpretation, and it comes with a catch. If a long lease can make a quay bankable, it can also make a quay a monopoly, and it can bind a government for longer than any one government lasts.

Emily Martin

There's also a reason the shoreline is scarce in a way that's easy to miss. The Logistics Cluster describes Freetown's port as sitting in the busy and congested eastern end of the city, and it says that the land is valuable because its area is limited and the need to maximize efficiency is high. The same profile says Freetown has one of the finest natural harbours on the West African coast, with a well protected anchorage. Nectar Group, one of the operators we'll meet, goes further and calls it the largest natural harbour on the African continent, but that's a company's own description, so take it as a claim rather than a measurement.

Zach Martin

Natural harbour plus limited land equals a natural bottleneck. Deep, sheltered water doesn't appear on demand. Nature gives it to you in a few places, and the capital city grew around one of them. When you can't easily build a second one, whoever holds the operating rights on the first one holds something close to a natural monopoly. Again, that's the economic logic, and we'll test it against what the sources actually show.

Emily Martin

So here's the road map. First, how Sierra Leone went from running its own port to being a landlord. Then Freetown Terminal, the container side, Berths 3 to 6. Then the Nectar bulk terminal on Berths 1 and 2, where the cargo is rice and flour. And then we leave Freetown and go north to Pepel, where a railway and a port were leased, cancelled, negotiated again, and ratified in a form nobody predicted at the start. That last case is the one that shows what happens when a chokepoint has rivals and a political audience.

Zach Martin

And one promise to the listener. There are things we can't see. The exact royalty that the container operator pays the treasury per box is not public in anything we found. The tariff schedules aren't on a website either. When we reach a gap, we'll say so out loud instead of filling it with a guess.

Emily Martin

Let's start with what the old model looked like. The Sierra Leone Ports and Harbours Authority describes the history on its own site. The Ports Act, Act No. 56 of 1964, as amended in 1991, gave the Sierra Leone Ports Authority the mandate to manage and control all port related activities in the country, to operate the Port of Freetown, and to oversee Nitti and Pepel. In the textbook language, that's a service port. The state owns the shoreline, owns the cranes, employs the port labor, and runs the cargo operations itself.

Zach Martin

And the standard diagnosis of that model is capital starvation. A public authority has to compete with schools and hospitals and roads for the same budget, so the crane that needs replacing waits, the channel that needs dredging waits. We can't verify every piece of that diagnosis for Sierra Leone in the 1990s and 2000s. But the Logistics Cluster profile does give us a symptom. It says that because of a lack of dredging in the port, the draft limit is falling, and that masters now notice their vessels sitting on a muddy surface while berthed, especially at berths 4, 5 and 6. That is a quay wall losing the one thing it exists to provide, which is water under the ship.

Emily Martin

So the government made a choice. The Port Authority's site says the Government of Sierra Leone, through the National Commission for Privatization, decided to transform the management of the port from a service port to a landlord port, and that this led to the privatization of core port activities to private operators. Elsewhere on the same site, the operations department says the shift to landlord operations happened in 2011, facilitated by the privatization bill. The bidding for the container terminal began earlier, in October 2009, but 2011 is when the new arrangement was actually running.

Zach Martin

Let me give you the analogy I'd use. Imagine you own a building on a great corner, and you used to run the restaurant inside it yourself. The kitchen keeps breaking down, you can't afford a new oven, and the service is slow. A landlord model says, keep the building, find a specialist who will bring the ovens, the staff, and the know how, and sign a long lease. You still own the corner. You collect rent, you set rules about health and safety, you can walk in and inspect. But you're no longer the one flipping the burgers.

Emily Martin

And the Authority states the policy in almost exactly those terms. The operators perform the core port operations and must strictly adhere to the provisions of their concession agreements, while the Authority monitors, supervises and regulates their activities. There's also an important institutional update. The 1964 Ports Act was repealed. The Sierra Leone Ports and Harbours Authority was established by Act No. 29 of 2023, and it holds the role of operating, managing and coordinating maritime activities within Freetown's ports and harbours, along with the river ports of Nitty and Pepel.

Zach Martin

I noticed something small but telling there. The Authority's own website still carries a lot of language from the older era. Some sections refer to the Sierra Leone Ports Authority and the 1964 Act, while the front page announces the new 2023 body. That's what a transition looks like on the ground. The institution has a new statute, but the documents, the habits, and the contracts still run on older paper. It's a reminder that a concession outlives the legal moment that created it.

Emily Martin

Now, why twenty to thirty years? Why not five, why not ten? This is the heart of the business logic, so let's walk through it slowly. A modern terminal has a few huge, lumpy costs. A quay wall. Dredging a channel deeper, say from around nine meters toward thirteen. And cranes. Ship to shore gantry cranes, the giant ones that reach across a vessel, can cost ten million dollars or more each, and a terminal needs several, plus yard cranes behind them. None of that earns its money back in two or three years.

Zach Martin

Here's where I'd plug in the mortgage analogy. Nobody gives you a thirty year mortgage on a house you're only allowed to live in for two years. The lender asks, how long do you have the right to be there? If the right expires before the loan does, the collateral isn't really collateral. Project finance for a port works the same way. The lenders could be development finance institutions or international commercial banks. They look at the cash the terminal will generate, and they want the operator to hold the legal right to earn that cash for longer than the loan lasts. In the language of finance, this is nonrecourse or limited recourse lending, where the repayment comes from the project and not from the government's general credit.

Emily Martin

So the concession term is doing double duty. For the operator, it's the period over which the investment is recovered. For the lender, it's the guarantee that the asset is still earning when the repayments come due. That's what I mean when I say a long lease turns physical access into a balance sheet asset. The right to operate at that particular stretch of water's edge becomes something you can show to a bank, something that can sit in the accounts, something that can even be sold on to another company.

Zach Martin

Now, where does the money flow? I want to describe the usual shape of these deals, and I want to flag that this is the general structure, not a disclosure of Sierra Leone's actual tariff book. The Logistics Cluster page notes that there's no website containing the rates and tariffs, though it lists annexes covering clearing tariffs, port authority tariffs, transportation tariffs, and terminal operation charges. So we know the categories exist. We haven't seen the numbers.

Emily Martin

Think of it as a waterfall with two layers. The top layer is the concessionaire's revenue. Terminal handling charges for moving a box on and off a ship. Wharfage, which is a charge for goods crossing the quay. Stevedoring, the loading and unloading labor. Dwell time charges when a container sits too long. Plug in fees for refrigerated containers. Storage for goods held under customs bond. In many concessions around the world, those charges are priced in dollars or euros. If that's the case here, and we can't confirm it from the sources, the effect is that the operator is insulated if the local currency weakens.

Zach Martin

And the second layer is the sovereign or landlord return. An upfront concession fee when the contract is signed. A fixed annual land rent. A variable payment tied to volume, typically per container or per ton. Corporate taxes on the operator's profits. And in some deals, the government takes a carried equity stake, meaning a shareholding it doesn't have to fully pay for in cash. In Freetown's container terminal, as we'll see, the government holds twenty percent of the operating company.

Emily Martin

What I find worth sitting with is who carries which risk. The operator takes the volume risk. If fewer ships come, the operator's revenue falls. But the operator has insulated itself from currency risk, at least in the general structure. The state, meanwhile, gets cash and rent and a share of volume, and it keeps the land. The people at the far end of the chain are the importers and, in the end, the households who pay for what comes over the quay. When we say the shoreline becomes an investable asset, somebody pays the yield, and the quay is the place where that yield is collected.

Zach Martin

That's the interpretation line, so let me mark it. We are not saying Sierra Leone's tariffs are too high or too low. We don't have the data to say it. We're saying that in any concession, the structure of the contract tells you where the toll booth is, who owns it, and for how many years. Let's go look at the biggest toll booth in the country, the container terminal.

Zach Martin

Here's the timeline, using Freetown Terminal's own website and the Logistics Cluster profile. In October 2009, the National Commission for Privatization began a competitive bidding process to concession the container terminal at Queen Elizabeth II Quay. Bolloré Transport and Logistics, of which Freetown Terminal Limited is a subsidiary, emerged as the successful bidder. A concession agreement was entered into on 25 November 2010 between the Sierra Leone Port Authority, the Government, the National Commission for Privatization, Bolloré Ports, and Freetown Terminal Limited. It came into effect in March 2011.

Emily Martin

And what the contract actually hands over is specific. The Logistics Cluster says it's the right to use, manage, operate and maintain berths 3 to 6 and all surrounding areas along with the fixed assets. Freetown Terminal's own site says the agreement gave the company one hundred percent of the right to operate the container terminal. So this isn't a license to do some work on the quay. It's exclusivity over the container business at the country's main port. And the Logistics Cluster page describes it as a twenty year concession that included plans to renovate and modernize the terminal.

Zach Martin

Then comes the part that I think is the best single example in the episode of how a lease gets stretched. The terminal's website says that since signing, there have been addenda amending the agreement, and that Addendum Number 4, signed in September 2015, contained the development of a new berth, 270 meters long with a depth of 13 meters. It also included the installation of modern equipment, two ship to shore cranes and four rubber tire gantry cranes. The berth is described as costing 120 million dollars, and the site says Bolloré, through Freetown Terminal, will operate the container terminal until 2041.

Emily Martin

Let me do the arithmetic that sits underneath that sentence, and I'll flag it as our arithmetic. If the original term ran twenty years from the March 2011 start, that points to roughly 2031. The addendum takes the horizon out to 2041. So the pattern looks like this. The operator commits a big new block of capital, 120 million dollars, and in the same document the clock gets extended by about a decade. The investment justifies the extension, and the extension justifies the investment. That's the loop that makes a concession bankable.

Zach Martin

Let me give a simple way to feel why. Take that 120 million dollars and divide it by the 84,665 containers, counted in twenty foot equivalent units, that Freetown Terminal reported handling in 2014, which is the year in the Logistics Cluster table. You get roughly 1,400 dollars per box. If you tried to recover the whole build in a single year of traffic, every container would carry that burden. Spread it across decades, and it becomes a small slice of each box. This is not a payback model. It ignores interest, operating costs, and growth. It's just the arithmetic of tenor. Time is what makes a heavy investment affordable per unit.

Emily Martin

And why that particular investment? The same profile gives you the physical reason. It lists the draft at berth as seven to ten meters, with container berths at a maximum draft of ten meters. It says that for lack of dredging the draft limit is falling, and ships are sitting on mud at berths 4, 5 and 6. Larger container ships need more water than that. So a new berth with a thirteen meter depth isn't a cosmetic upgrade. It decides which class of ship can call at the capital at all. The profile also records that the longest vessel allowed is about 236 meters.

Zach Martin

Also interesting is what the Logistics Cluster profile says about the old equipment. In the table of Freetown Terminal's equipment, dockside cranes are marked as not available, container gantries are not available, and the terminal relied on mobile cranes, reach stackers, and tractors. Again, that profile is dated around 2015, since it speaks of equipment arriving by the end of 2015, so it describes the position just before the addendum. It tells you the starting point the new cranes were meant to change.

Emily Martin

Now the second half of Addendum 4, which I think is underappreciated. The terminal's website says that in the addendum the Government of Sierra Leone was made an equity owner of twenty percent of the shares in the company. So the government is landlord, regulator through the Ports Authority, tax collector, and also a shareholder in the operating company. That's a lot of hats at one quay.

Zach Martin

It cuts both ways, and we should say so honestly. On the one hand, a twenty percent stake means the state shares in the upside. If volumes rise and the terminal earns more, the government benefits as an owner, not just as a tax collector. Its interest in the terminal's success is aligned. On the other hand, a regulator that is also a shareholder might feel less appetite to push tariffs down, since lower tariffs reduce the dividend. We have no evidence that this has happened in Sierra Leone. It's the kind of question that a good tariff regulator exists to answer, and it's the kind of question you'd ask of any deal with that shape.

Emily Martin

Let's go to the ownership chain, because it adds a twist. In late 2022, as reported, the Mediterranean Shipping Company, MSC, the world's largest container shipping line, agreed to buy Bolloré Africa Logistics. The figure in our brief is 5.7 billion euros. The AGL group's own announcement describes the deal as backed by the financial strength and operational expertise of the MSC Group. In Sierra Leone, the operation became part of Africa Global Logistics, or AGL, which was rebranded in January 2024 according to our brief. And here's a small wrinkle. Freetown Terminal's own About page describes the company as formerly a subsidiary of Africa Global Logistics. We couldn't tell from the page alone what the current ownership chain looks like, so we'll leave it there.

Zach Martin

What that sale shows is that the concession travels. Nobody in Freetown signed a new agreement with MSC in the way that the 2010 agreement was signed with Bolloré. The right to operate berths 3 to 6 sat inside a company that changed hands. When an investor buys a global port operator, part of what's being bought is a portfolio of those rights, in many countries, each one a long lease on somebody's shoreline. That's the sense in which it's a tradeable asset.

Emily Martin

And it raises a structural question about incentives. A container shipping line owning a terminal is called vertical integration. The company that moves boxes across the ocean also owns the gate where its own boxes and its competitors' boxes come ashore. In principle, that creates a temptation to favor your own ships on berth windows or to price in ways that disadvantage rivals. I want to be very clear. We have seen no evidence in our sources of any such behavior in Freetown. It's a structural risk that regulators in many countries watch for, and the point is that an open access rule needs a referee.

Zach Martin

Which brings us to the tension at the center of this chapter. The operator spent real capital, it needs a return, and its return comes from handling charges on cargo that has nowhere else to go. Rice, fuel, medicine, building materials, anything in a box. These are not discretionary purchases that people will skip if the gateway fee goes up. So how does a coastal developing country keep a natural shoreline monopoly from becoming a toll on every household?

Emily Martin

There are a few tools, and each has limits. One is a tariff cap or approval process written into the concession, so the operator can't just reprice at will. Another is performance standards, such as maximum waiting times, with penalties. The Logistics Cluster page quotes an average wait between arrival and berthing of 0.6 days, per Freetown Terminal, which shows that this kind of number is at least measured. A third is competition, but here the two terminals handle different cargo, so they don't compete for the same boxes. And a fourth is transparency, publishing the rates. The Logistics Cluster says there's no website with rates and tariffs. So you can see which tool is weakest from the outside.

Zach Martin

One more thing I'd highlight, because it's counterintuitive. The concessionaire doesn't hold the whole chokepoint. The same profile says all containers must be scanned by the customs scanning machine at the port, and that the capacity of scanning is between 100 and 120 containers per day, which it says limits the number of containers that can be delivered from the port. It also says deliveries inside Freetown by truck can only leave the port after 8 PM. Those are details of a profile from around 2015, and things may have changed. But they illustrate that a gate has several locks. A very efficient crane doesn't help if the scanner downstream is the bottleneck.

Emily Martin

And that's a useful correction to our own thesis. Concessions give an operator power over the quay, but the real choke may sit in customs processing, in trucking rules, in storage. The same profile says the port had limited warehousing capacity, which obliged direct delivery for bulk cargoes. When someone says the port is slow, you have to ask which part is slow, and which contract, which agency, or which machine governs that part.

Zach Martin

Let me add the last piece, which is the lock in. A concession running from 2011 to 2041 spans five or six presidential election cycles. A government that comes in thinking the deal was too generous can't just tear it up. A concession is a contract, and contracts with foreign investors often come with international arbitration clauses and sometimes the protection of investment treaties. That's interpretation, since we haven't read the Freetown agreement and nobody has published its dispute terms in our sources. But as a general pattern, the longer the lease, the more a future government's power to change the deal is replaced by a legal process that it doesn't control.

Emily Martin

So that's the trade the country makes. It exchanges flexibility for capital. It gets cranes, a deeper berth, a share of the equity, and the risk moved onto a private balance sheet. It gives up the ability to easily renegotiate for three decades. Whether that's a good trade depends on the terms we can't see and the performance we can only partly measure. What we can say is that the container gate in Freetown is now a contractual asset with a date stamped on it, 2041.

Emily Martin

Next to the container berths sits the other half of Queen Elizabeth II Quay. The Logistics Cluster profile says berths 1, 1A and 2 are designated bulk and breakbulk specific berths, and that in September 2015 Nectar Sierra Leone Bulk Terminal took over control of the terminal from the Sierra Leone Port Authority, which it calls the port landlord. Operations started at the beginning of October 2015. The Ports Authority lists Nectar Sierra Leone Bulk Terminal Limited as the concessionaire of the non containerized cargo terminal, alongside Freetown Terminal Limited for containers.

Zach Martin

I want to flag a number there that doesn't look like the container deal. The Logistics Cluster says Nectar Group Limited signed a ten year license agreement with the Government of Sierra Leone to operate the bulk terminal. Ten years, compared to a twenty year container concession that stretches to 2041. If that ten years was counted from 2015, you'd be at about 2025. Now, we don't know the current terms. We found nothing public about whether that license was extended or renegotiated.

Emily Martin

And that matters, because of what Nectar did next. According to Nectar's own case study, the group undertook the design and construction of a new deep water berth of 190 meters and enhanced quay space of 1.2 hectares, which is 12,000 square meters, together with refurbishment of the existing berths. The partners it names are Marine Consulting Engineers, Beckett Rankine, and the civil engineering firm Eiffage Génie Civil. It describes the terminal as Sierra Leone's primary multi user bulk and breakbulk port, and says that since 2015 Nectar has supported the port with substantial investment.

Zach Martin

So here is my inference, and I'll label it clearly. A company doesn't normally pour money into a new deep water berth on a license that is about to expire, any more than you'd renovate a rented kitchen with three months left on the lease. So I'd guess there is a longer term arrangement in place, or an understanding of one. But that's an inference. We haven't seen the document, and the sources don't say. It's a good example of why the tenor of the lease is the first thing an analyst wants and the last thing that tends to be published.

Emily Martin

Now the operating milestone. Nectar reports that the terminal welcomed its inaugural vessel at the new berth, the SAFI NALFI, on Friday, 20 December 2024, carrying bagged rice. The berth now accommodates vessels of 225 meters and an operational draft of 11.5 meters, with a design draft of 13 meters. And the company says the steady arrival of vessels through 2025 has increased capacity at the port by more than 30 percent. The cargo it lists includes bagged rice, flour, crude oil, and aggregates.

Zach Martin

Notice the gap between 11.5 and 13. The berth was designed for thirteen meters of draft, but it operates at 11.5 today. That's a common pattern. You build the structure for the deeper future, and you dredge or certify to that depth when the traffic and the channel justify it. It's also a sign of how much of the value here is an option on the future. The foundation is built for ships that haven't yet arrived.

Emily Martin

I should say that all of these numbers come from Nectar itself. These are company statements, in a case study and a press item, so the more than thirty percent capacity increase is the operator's own claim and not an independent audit. The company's general manager, Siamba Kamara, is quoted saying that cargo handling at the terminal has been exceptionally efficient and well coordinated, with the team minimizing delays and ensuring safe handling of all types of cargo. That's a reasonable thing for an operator to say about its own terminal, and it's exactly what a regulator should be checking against data.

Zach Martin

The list of improvements Nectar gives is worth reading as a shopping list of what a concession pays for. Upgrades to equipment. Traffic management to cut waiting times. Improved storage with better use of space. Better lighting, signage, and solar power on the quay. And technology, including real time cargo updates, efficient scheduling, and what it calls transparent pricing structures. I'd underline that last phrase. A promise of transparent pricing is a good thing, and it's also a promise you can hold the operator to.

Emily Martin

Now let's connect this to the dinner table. Our brief makes the point that Sierra Leone is a net importer of staple grain. I'd treat that as the framing that makes this quay more than a commercial asset. If rice, flour, and similar staples arrive at berths 1 and 2, then the efficiency of those berths, the tariff per ton, and the waiting time for a ship all feed into the price in local markets. Nectar's own announcement ties the new berth to the government's medium term national development framework for 2024 to 2030, whose title names food security, human capital development and job creation.

Zach Martin

Let me explain the mechanism without overselling it. Bigger ships generally spread their voyage costs over more tons of cargo, so in principle a berth that takes a 225 meter vessel can lower the freight cost per ton. Faster turnaround means a ship spends fewer paid days at anchor. Those savings can reach the price of rice. But they might not. Whether they do depends on the tariffs charged at the quay and on whether importers compete away their savings or keep them. We can't see either from outside, so the honest statement is that the quay creates the possibility, and the pricing decides who captures it.

Emily Martin

And there's a flip side to that same quay. The people who shipped relief food here in the past got a special arrangement. The Logistics Cluster says the World Food Programme had in the past been given priority berthing for breakbulk vessels alongside berth 4. Elsewhere in the same document it says there's no established priority for humanitarian cargo. So the profile itself carries a little tension between what happened in practice and what's formalized. In a state run port, priority berthing is a policy decision. In a concession, it's a contract term, and if it isn't written down, it's a favor.

Zach Martin

That's a great detail, because it shows how a lease changes the nature of authority. In a service port, a minister can phone the harbour master and ask for a berth for a food ship. In a landlord port, the berth belongs to an operator with commercial obligations to its other customers. The state can still demand priority, but now it does so through the contract. The shoreline didn't change. The channel through which the government uses it did.

Emily Martin

So the lesson of the bulk terminal is a different one from the container terminal. The container story is about a very long lease and a global owner. The bulk story is about a shorter public license, a private investor that keeps building, and a cargo, rice, that every household feels. In both cases, the physical improvement is real and visible. In both cases, the part we can't see is the price and the term.

Zach Martin

Now we leave Freetown and go north, because the third case answers a question the first two can't. What happens when the chokepoint is controlled by someone who is also a customer? The Pepel corridor is a railway of about 200 kilometers, and a port at Pepel in Kamasondo Chiefdom, in Port Loko District. The lease text describes the railway as approximately 200 kilometers from Pepel to Tonkolili, plus the port transhipment and loading facilities and the land beneath them. A news report from the time gives the railway as 192 kilometers, so again the sources round differently.

Emily Martin

The reason this corridor exists is iron ore. The AidData record on the Tonkolili project describes a proven reserve of 10.5 billion tons of iron ore. Sierra Leone's Minister of Mines at the time, Timothy Kabba, spoke in 2023 about a concession of six to seven billion metric tons of an estimated twelve billion at Tonkolili. That is a large resource sitting inland, and the only economic way to bring it to the sea is the rail line. A single mineral train can replace a very large number of truck journeys, which is why the railway matters more than any road.

Zach Martin

The financial history of that corridor is a cautionary tale in itself. According to AidData, African Minerals Limited signed a 1.7 billion dollar construction contract with China Communications Construction Company in December 2011. That covered the rehabilitation of the port, the reconstruction of 74 kilometers of existing railway, and a new 126 kilometer line. Together that's your 200 kilometers. Production began in November 2011. In 2012, a Shandong state backed steel group bought a 25 percent stake for 1.5 billion dollars, financed in part by a 1.2 billion dollar loan from China Development Bank.

Emily Martin

Then it unraveled. AidData describes how falling iron ore prices and the Ebola outbreak hit the company in 2013 and 2014, how the mine was temporarily closed in December 2014, and how African Minerals entered administration in England in March 2015. In April 2015 the Shandong group's subsidiary took the remaining 75 percent, reportedly for more than 170 million dollars, effectively by agreeing to repay the outstanding pre export finance facility. In 2019 the Shandong group halted operations after its license was cancelled by the government, and in September 2020 the government handed the Tonkolili project to Kingho Mining Company.

Zach Martin

And here's where the lease idea comes in. The Kingho Railway and Port lease agreement is dated 8 January 2021. The text on the Ministry of Mines site says the government had acquired the railway and the port facilities and now desired to exclusively lease them to Kingho Railway and Port Company Limited, for a term of certain years, for occupation, use, management, operation, maintenance and rehabilitation. The Sierra Leone Telegraph reported that the lease would let Kingho's subsidiary use the infrastructure for moving its iron ore, and that it would also commercialize the use of the railway and port for other users along the corridor.

Emily Martin

AidData adds two details. It says Parliament ratified the lease in May 2021. And it says the lease included a small flat rate of 1.25 million dollars as rent to the government. Also, the lease reportedly makes provision for Kingho to haul the commodity of any other company along the rail corridor under a commercial agreement. And the company changed its name to Leone Rock Metal Group in October 2021. So now you have the mining company's affiliate holding exclusive control over the only way out for competing miners' ore, with a commercial agreement as the only promise of access.

Zach Martin

That's the chokepoint problem in its sharpest form. In Freetown, the container operator and the rice importer are different businesses. At Pepel, the operator of the rail and port was a sister company of a miner. Think of a toll road where the owner also runs a trucking company that uses the road. The owner has a reason to make sure its own trucks get through first. Whether it does anything of the kind is a matter of evidence, but the incentive is built into the structure.

Emily Martin

And the government seems to have seen the same thing. Kabba told Vickie Remoe's blog in February 2023 that it was always the government's intention to find a third party to manage the rail and port. He said that upon signing the lease in 2021, the government reserved the right to engage a port operator to run the railway and port independently after the first two years of the lease, provided it sent six months' notice to Kingho. And AidData records that on 10 January 2023, the government decided to terminate the lease. Another miner, Marampa Mines, had a dispute with the government that Kabba says was settled on the condition that Marampa would get access to the rail.

Zach Martin

The replacement was ARISE Integrated Industrial Platforms, known as ARISE IIP. Vickie Remoe's report says it would operate and expand the 200 kilometer rail and port, with a 476 million dollar investment and a 25 year lease, adding 25 kilometers of rail. It describes payments of 1.1 million dollars a year plus what it calls a 10 percent profit on total export. That phrasing is loose, so I wouldn't treat it as a precise term. Kabba's argument was that the new arrangement would give a level playing field to all the mines in the northern corridor.

Emily Martin

He said something I think captures the policy logic. Quote, it is not in Sierra Leone's interest to strangle any existing investors. On the contrary, with ARISE IIP's investment, we will stimulate growth through increased production at a reduced cost for all. End quote. So the argument is that a neutral operator who doesn't mine makes the corridor a service that all miners can use, and that growth in total tonnage is better for the country than one miner's control.

Zach Martin

Then the plot changes. A commentary in the Global Times Sierra Leone newspaper, written by Amadu Daramy, says the ARISE lease went to Parliament for ratification and was put on hold. It alleges that pressure was applied, that the Chinese Vice President raised the Pepel issue with President Bio at the margins of the UN General Assembly, citing diplomatic sources in Freetown. It also alleges that other miners were frustrated in using the line, and that IMF officials had advised the government to get a private company to manage the corridor for the sake of transparency and to avoid under declaration. I want to be very clear that this is an opinion piece that advocates for ARISE, and the author himself notes that some reports are unverified. We can't confirm any of those causal claims.

Emily Martin

So let's separate what we can document from what we can only infer. Documented: AidData records a 2021 commitment of a China Development Bank loan of about 2 billion dollars for phase two of the Tonkolili project, though it also notes it assumes the Kingho affiliate was the borrower, and says that issue warrants further investigation. Documented: a groundbreaking ceremony for phase two was held on 30 March 2023 with the President and the Chinese Ambassador in attendance, and contracts worth 520 million dollars were signed with a Chinese state owned contractor. Documented: an upgrade of the railway and port with 153 million dollars of planned investment was launched around April 2023. And documented: AidData says that as of October 2023 a new twenty year agreement had been negotiated but not completed.

Zach Martin

And then the outcome, per our brief and the Sierra Leone Monitor report. On 9 November 2023, Parliament approved a new Railway and Port Lease Agreement between the government and Kingho Railway and Port Company, now Leone Rock Metal Group, for up to twenty years. The agreement requires multiple user access for rival bulk miners and establishes an independent transport regulatory unit to monitor rail and port operations and prevent discriminatory access. So the lease was cancelled in January 2023, a rival operator was announced, and by November the original operator was back under a new form of contract, with open access rules and a referee added.

Emily Martin

Here's my reading, which is interpretation. The ARISE episode shows that a lease isn't only a contract between a state and an operator. It's also tied to a web of debts and diplomacy. If a lender has put billions into a mine, the rail and port that carry the ore are part of the lender's collateral story. Changing the operator of the port changes the risk of the loan. That's the same logic that makes a long lease bankable in Freetown, now seen from the other side. The people who financed the asset have a stake in who controls the gate, and a government deciding to move the gate has to consider them.

Zach Martin

I want to pause on the phrase multiple user access, because it's the fiction and the fix at once. On paper, it says that anyone who wants to ship ore must be treated fairly. In practice, a rail line has limited train slots, a port has limited berth windows, and someone decides the dispatch order. If the dispatcher is a company that mines its own ore, how do you prove that the rival's train was delayed for a reason other than operations? The answer people usually reach for is the independent regulator, with the power to audit schedules, publish data, and impose penalties. So everything depends on whether the new regulatory unit has the staff, the data, and the independence to do that. Nothing in our sources tells us yet.

Emily Martin

There's also the question of who in the local community sees money from all this. Vickie Remoe's article describes how in 2022 Sierra Leone passed the Customary Land Rights Act and the Land Commission Act, which give landowners the power to negotiate the value of their land and require companies to obtain community consent. Kabba said that when Leone Rock came, the outstanding surface rent on the Tonkolili concession had gone unpaid for two years, and that the accumulated rent paid to five chiefdoms was 40,000 dollars. He said the annual surface rent would increase from 20,000 dollars to 250,000 dollars, which is 50,000 dollars for each of five chiefdoms.

Zach Martin

Now the honest limit on that. That rent is surface rent for land along a corridor. It's not a share of port traffic. Whether chiefdoms along the infrastructure receive direct cash from the volume that actually moves across the port is contested by civil society, and our sources don't settle it. So when we say the shoreline becomes investable, we should ask who is in the room when the investment is priced. The land rights improved on paper in 2022. The question is whether the port's revenue waterfall has a stream running toward the places the infrastructure physically crosses.

Emily Martin

Let me try to pull the three terminals together. Freetown Terminal is the long lease with a global owner, a twenty percent state stake, and a date of 2041. The Nectar bulk terminal is a shorter public license, a private builder, and a food import channel. Pepel is a corridor lease that changed hands, was cancelled, was bid out to a neutral operator, and came back to the incumbent with new rules. Three terminals, three versions of the same trade. The state keeps the land and rents out the gate.

Zach Martin

And if you're a listener who wants to take something practical away, here's the coach's version. Whenever you hear about a port, a terminal, a rail line to the sea, ask three questions. Who owns the land under it? Who holds the lease, and when does it expire? And who stands between the operator and everyone else who needs the gate, with the data and the power to say no? If you can't answer the third one, you don't yet know what kind of asset you're looking at. And a reminder that none of this is investment advice.

Emily Martin

Here's the picture I'd leave you with. A kilometer of concrete at the edge of Freetown, built in the 1950s and opened by a queen, now divided into berths with different tenants and different clocks. One clock runs to 2041. Another began as ten years in 2015. And far to the north, a railway and a port had their leases cancelled and ratified again in the same year. The country you don't see is the one that sits behind those contracts, and the water's edge is where it turns out that geography, law, and finance all meet.

Zach Martin

That's the show for today. I'm Zach Martin.

Emily Martin

And I'm Emily Martin. This has been Ocean Capital Desk, an IRHUB Media and KMKT original, from The Invisible Economy. The country you don't see.