Mining in Sierra Leone

Political History

Sierra Leone has been a major diamond producer for 70 years, but it has one of the lowest Gross National Products in the world. Civil war ravaged the country from 1991 to 2002, primarily over the distribution of wealth from the country's diamond mines. In October 1999, the U.N. Security Counsel established the United Nations Mission in Sierra Leone (UNAMSIL) to help implement disarmament.

At the beginning of July 2000 the United Nations Security Council decided to impose an 18 month ban on diamond exports from Sierra Leone. Recognizing that diamonds had been fueling the conflict that the rebels had been mining diamonds and selling them to fund their weapons purchase and other activities, including human rights abuses. Additionally, in July 2001, a diamond mining ban was announced in Sierra Leone in an attempt to address the violence and curb human rights abuses.

UNAMSIL successfully completed its mission in December 2005. It was succeeded by a new mission, the United Nations Integrated Office for Sierra Leone (UNAMSIL) established by the Security Counsel to help consolidate peace in Sierra Leone.

Mining History

Diamond output in Sierra Leone was 600,000 carats in 1999, 2000, and 2001, 250,000 in 1998, and 400,000 in 1997; most production was by artisanal miners. It was believed that a substantial portion of the diamonds close to the earth's surface was smuggled out of the country. Alluvial diamonds, first discovered in Kono District in 1930, were widely scattered over a large area, but particularly along the upper Sewa River. The main diamond deposits were the Koidu and Tongo fields. Diamond Works Ltd., of Canada, which owned 60% of the Koidu mine (reserves of 2.67 million carats), announced in 2001 that it was returning to Sierra Leone. Diamond Works also held diamond exploration licenses on the Sewa River with reserves containing 1.7 million carats. Production of alluvial gold in 2001 was 30 kg, down from 123 kg in 1994.

For 25 years, the Sierra Leone Selection Trust (SLST), a subsidiary of the Consolidated African Selection Trust, had exclusive diamond prospecting rights and gave the government 27.5% of its annual net profit. However, this monopoly, plus numerous finds of gem diamonds at or close to the surface, encouraged so much illicit mining and exportation that, in 1955, the government renegotiated SLST's concession, limiting it to two areas, Yengema, in Kono District, and Tongo, in Kenema District, and compensated the company for surrendering its rights in other areas.

In 1956, the government introduced the Alluvial Diamond Mining Scheme, in which Sierra Leoneans were issued licenses to dig in declared areas totaling more than 23,300 sq km (9,000 sq mi). In addition to a licensing fee, each licensee had to pay land rental to the local chiefdom authorities and could employ up to 20 diggers. A buying organization, the Government Diamond Office (the Government Gold and Diamond Office since 1985), was set up in agreement with the Diamond Inc., in London. Foreigners, who had figured significantly in illicit diamond dealing, were removed from the diamond-mining areas. In 1962, the government ordered the SLST to sell all its diamond through the government office. In 1970, the government acquired a 51% interest in SLST and formed the National Diamond Mining Co. (NDM).

In 1991, the government started returning control of diamond and gold export activities back to the private sector, to curtail illicit trading and maximize revenues. New mining policy in 1994 made requirements for licensing miners and exporters more rigid, to address the heavy revenue losses from illegal trading in diamonds and gold. NDM ceased operations in 1992, partly because of rebel activities in the Yengema mining district.

A 1999 amendment to the 1994 Mines and Minerals Act introduced procedures for sale and export of precious minerals by license holders, and penalties for unlawful possession or smuggling of precious minerals. In 2001, Sierra Leone and Angola introduced a diamond certification scheme in response to UN sanctions aimed at prohibiting importation of diamonds from rebel-controlled areas in the countries.

Current Status

Currently, the mining business in Sierra Leone includes about 2,500 small operations.
In 2007, Sierra Leone officially exported over $175 million worth of diamonds, government records show. That is a vast improvement over the $24 million officially exported in 2001, before stringent new rules known as the Kimberly Process required diamond deals to be certified by the authorities.