Sierra Leone Plans for Diamond Expansion

June 23, 2003

Sierra Leone Plans for Diamond Expansion

The Republic of Sierra Leone's President Ahmad Tejan Kabbah marked the first anniversary of his country's peace by vowing to transform the diamond industry. He spoke at the June 20 state opening of the second session of the second Parliament. While acknowledging that the diamond industry has not brought under full control the problems of "smuggling, exploitation, cheating and chaos," Kabbah said "the government is committed to bringing about a well-regulated and transparent diamond mining and trading regime for the benefit of the state and people of Sierra Leone."

Kabbah spelled out three measures the government was taking on advice from the World Bank and industry experts. They include:
• Enforcing existing diamond mining and trading legislation and empowering the Sierra Leone police as the primary body for the enforcement of that legislation.
• Inviting an international diamond mining company to determine and recommend the conditions which must be implemented in order to bring maximum revenue to Sierra Leone.
• Regularly publishing the value of diamonds exported, the tax funds raised and the disposal of that revenue.

Kabbah said he commissioned a high-resolution magnetic survey in April, carried out by the Africa Diamond Holdings Ltd. This survey covered the Koinadugu and Kono districts. Similar surveys of the rest of the country are planned. One objective of these surveys is to determine the extent of existing Kimberlite diamond deposits and discover new ones.

He said alluvial diamond mining has recently started in the Kambia and Bombali districts and the government is taking the appropriate steps to regulate and manage mining activities in these areas. Alluvial diamond mining areas, more open and unregulated than private diamond mines, are more vulnerable to smuggling and exploitation. Special care must be taken, studies have shown, to prevent the kind of chaos and cheating Sierra Leone suffered during its decade-long civil war.

In a final note, Kabbah said better incentives for investment in the mining sector are also being provided by the government. He announced the mining industry income tax rate will be lowered from almost 38% to 30%.

In other parts of his speech Kabbah said improving security and reducing crime has been a priority during the first year of peace for Sierra Leone, both of which will improve conditions in the diamond sector. A Sierra Leonean inspector general of police recently took control of police functions from the British and police stations have been rebuilt. Police training has advanced and the nation's law enforcement infrastructure has been reorganized, with special emphasis placed on improving transportation so police can respond to crime rapidly anywhere in the country. The civil service has also begun reforms to restore state authority and prevent political intrusion with a new code to enhance professionalism and prevent cronyism.

by Peggy Jo Donahue

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