How China Kingho swindled over $ 40 Million on Iron Ore Export Yearly
An Extractive Industries Transparency Initiative revealed that Leone Rock Metal Group (LRMG), formerly Kingho Mining Company, under-reported Iron Ore exported from Sierra Leone in 2021 and 2022.
Unfortunately, in 2021, Sierra Leone Customs reported that Kingho exported 1.69m MT, but the Sierra Leone Extractive Industry Transparency Initiative (SLEITI) reported that 2.03M and 1.81M was exported by destination customs, which is a 17% under declaration of volume.
It was also revealed that Leone Rock Metal Group sells all its iron ore from Sierra Leone to Treasure Boost Trading in Singapore. Also in 2022, Leone Rock reported 5.40m MT to Sierra Leone Customs, while the actual figure is 6.30m MT.
Furthermore, it was disclosed that Leone Rock sold iron ore to its sister company ‘Treasure Boost Trading’ in Singapore at an average price of $57 per MT, whereas the market price of FE58 in China never dropped below $83 and averaged $107/MT. This in effect means that Kingho is selling the product inhouse at a price of about half of the actual market value.
Investigation revealed that in 2022, Leone Rock should have paid $20.7 million in royalty to Sierra Leone, but actually paid $8.3 million, due to under declaration of volume and sub-market sale to its sister company.
Thus, at full capacity of 20m MT per year, it would equate to a loss of $46 million that Sierra Leone is being cheated by Kingho every year.
Further investigation proved that Kingho Group has no capacity to invest in Sierra Leone, as it has been targeted by 47 equity freeze decisions in China since 2018, and more than 200 enforcement actions for unpaid bills.
Several entities of the Group are thus unable to draw funds and provide support to LRMG in Sierra Leone. Kingho owner, Huo Qinghua, himself has been restricted from high-level consumption on 181 occasions, which prevents him from performing his obligations in Sierra Leone.
Kingho has failed mining projects in China, Pakistan, Kazakhstan, Mozambique and Australia, cancelled by governments, due to Kingho inability to invest.