Having gone through a brutal civil war that made world headlines because of the use of diamonds to fund an evil rebel movement, Sierra Leone appears to have turned a new page.
The West African country with the help of the Kimberley Process, which it joined during its formative year, has managed to sanitise the industry although production remains disappointingly low.
The country produced just over 540 000 carats last year worth $163 million and it was targeting an output of 800 000 carats this year.
Sierra Leone had also been opening up its diamond industry, which had for some time dominated by artisanal miners and small scale miners mines, to foreign investors.
It was also battling to fend off illegal diamond smuggling mainly to Liberia where diamonds were fetching higher prices than what is being offered locally.
Our African Bureau Editor In Chief Mathew Nyaungwa recently caught up with Sierra Leone Deputy Mines and Mineral Resources Minister Abdul Ignosi Koroma in Cape Town, South Africa, who raised these issues during an exclusive interview.
Below are the excerpts.
What is the state of diamond mining in Sierra Leone?
The current state of diamond mining is very good. We have improved dramatically in terms of diamond sales and production ever since we joined the Kimberley Process Certification Scheme in 2003.
Talking of production, what was your diamond output last year?
We produced just over 540 000 carats worth $163 million.
So who mainly contributed towards this output?
Production came from both artisanal miners and industrial operations. I would say it was half-half. About $83 million of the total revenue realised came from Koidu Holdings, a South African company, which is doing kimberlite mining in the Kono District.
What is your projected output this year?
We are targeting $300 million.
That is revenue, what about carats?
Well, this depends on the quality of production, but we would want to see our output reaching over 800 000 carats from 540 000 carats we recorded last year.
Are there any industrial operations that are in the pipeline?
We are certainly expecting a lot more, investors are coming but they have not [made any determination] yet but we are hoping that more mining companies [willing to operate] on a large scale would come. Indeed, we are moving from artisanal mining, as you know, to focus on kimberlite mining, which is capital intensive. So we are hoping that more investors will come.
So what is the future of artisanal mining in the country, as we know that this is a source of living for many?
We are not stopping artisanal mining; there are regulations in place for artisanal mining and small-scale mining already. We are monitoring purposefully to get them regularise their statuses, and to get the required licenses in accordance with the law.
[We] enacted the law and now we are implementing it, so we do not have people coming into our country and take our precious minerals illegally.
Still on that what do you say about reports that some artisanal miners were smuggling diamonds to the neighbouring Liberia where they are being sold at a higher price than what is being offered in Sierra Leone?
The laws are there to mitigate this problem. We are actually trying to get our monitors trained and equip them as well as get more of them to help us reduce smuggling along our borders.
We have seen countries like Zimbabwe coming up with laws that limit foreign ownership in the mining industry. Do you have laws that cap the level of foreign ownership in local mines?
No, no, you know the ownership rest on the investor. They can take up to 100 percent ownership. The laws are quite straight-forward. It’s a one stop shop, you do your investigations, if you want to do exploration, if you find anything of commercial value then you come and apply for a mining license and we will issue a mining license to you. You build your mine and start mining, as well as pay your taxes to the government.
What is the percentage of your mining royalty?
Royalty is 6.5 percent for industrial mining and 3 percent for exporters.
As a member of the Kimberley Process, what do you think of efforts to re-define conflict diamonds?
In my opinion we should not under any circumstances allow conflict diamonds to go through the process because it is actually not something that serves the purpose for which the Kimberley Process was formed. I believe we should go along with the Kimberley Process’ proposal and continue to make sure that it does not fuel any wars, particularly from the stand point of my own country. Today we are very proud of seeing the progress of what has happened in the diamond mining industry as a result of the implementation of the Kimberley Process Certification Scheme.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
