Diamond industry in Sierra Leone

Sierra Leone is an independent republic in the West African region, bordered by Guinea on the north and east and Liberia on the South. The country was a British Colony since 1787, and became an independent republic in 1961. The capital city of Sierra Leone is Freetown, which derives its name from the freed slaves who were re-settled there after the abolition of slavery by the British in 1787. The country is rich in mineral resources such as diamond, gold , platinum, bauxite, chromite, iron ore, rutile, and monazite. The mainstay of the economy is agriculture followed by mining, the most important industry in terms of employment and exports. Diamonds mined in the alluvial deposits of the country are one of its main exports.

The diamond fields of Sierra Leone are situated in the hilly terrain, north of the town of Kenema, in the southeastern and eastern parts of the country. The area is bounded on the west by the Sewa-Bafi river and on the east by the borders of Liberia and Guinea. The diamond fields cover an area that constitute about one-third of the total area of the country. The diamond fields are mainly concentrated in the Kono, Kenema and Bo districts, and are situated in the drainage basins of Sewa, Bafi, Mano, Woa and Moa rivers.

Alluvial diamonds were first discovered in Sierra Leone in January 1930, by two Geologists of the Sierra Leone Geological Survey N. R. Junner and J. D. Pollet. A company by the name of Sierra Leone Selection Trust (SLST) acquired a diamond prospecting lease for the whole country, and commenced alluvial diamond mining in the Kono area in 1934, and annual production reached one million carats by 1937. In 1954 the company started mining in the Tongo area. In 1970, the Government of Sierra Leone established the Diamond Mining Company known as Diminco, which acquired a 51 % interest in the assets of the SLST. Peak annual output from the two fields in the Kono and Tongo areas exceeded one million carats in the 1960s and 1970s, but declined steadily to less than 100,000 carats by mid-1980s. Large scale illicit mining and smuggling of diamonds began after the country gained independence in 1961.

Kimberlite diamond pipes were first discovered in Sierra Leone in 1948 in the Koidu (Kono) area and later in the Tongo area. Studies conducted by diamond mining companies like the Koidu Holdings Ltd. and the Rex Diamond Mining Corporation have revealed the existence of substantial quantities of diamonds up to a depth of about 300 meters. Koidu Holdings Ltd. started trial mining and bulk sampling programs at the Kimberlite pipe in Koidu, producing an initial output of 18,000 carats, and the company has been given a license to exploit the other Kimberlite pipe at Tongo.

Sierra Leone was engulfed in a civil war between the Government and the Revolutionary United Front (RUF) rebels, between 1991 and 2002, that resulted in hundreds of thousands of deaths and the displacement of over two million people, who fled to the neighboring countries as refugees. The civil war destroyed much of the economy and infrastructure of the country. The rebel forces that controlled the diamond producing areas of the country, were diverting the diamonds produced to the international markets, through Charles Taylor's Liberia, and used the funds acquired to purchase weapons, to sustain the civil war against the government. The situation became so critical that the United Nations had to step in and impose a ban on the sale of diamonds originating from Sierra Leone and Liberia, which were referred to as "blood diamonds."

On the initiative of the United Nations all stakeholders in the international diamond industry which included the international diamond mining companies, international diamond dealers, the Central Selling Organization that controls the international diamond trade, diamond producing countries, diamond processing companies, and Non-Governmental Organizations, have been brought together, to formulate a policy on the orderly marketing of diamonds, known as the Kimberley Process. The main objective of the Kimberley Process is to exclude "conflict diamonds"or "blood diamonds"from the legitimate international diamond market, in order to prevent the financing of war through the sale of such diamonds. Blood diamonds have been implicated in the civil wars of many diamond producing African countries such as Sierra Leone, Liberia, Angola and the Congo. Under this arrangement legitimate diamonds are provided with certificates of origin known as the Kimberley Certificate, which has to accompany the diamonds from the time of production until it reaches the end users of the diamonds. No diamonds could be exported from one country to another without an accompanying Kimberley certificate.

After the official ending of the civil war in Sierra Leone in January 2002, and the disarming of the RUF rebels and the Civil Defense Forces, elections were held in May 2002, and the legitimate government of Sierra Leone had been able to re-establish its authority. In June 2003, the United nations lifted the ban on the sale of Sierra Leone diamonds, and the government of President Tijjan Kabbah, embraced the Kimberley Process, leading to increased investment in the diamond mining sector. Since the introduction of the Kimberley process, the export of legally mined diamonds increased rapidly from $ 10 million in year 2000, to $ 76 million in 2003, $ 127 million in 2004, and $ 140 million in 2005.

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