Sierra Leone sees recovery in diamond exports


Sierra Leone is seeing a recovery in diamond exports, its main foreign currency earner, after falling prices hit the sector in 2009, a senior mines official told Reuters.

Prices of the polished gems are up 11% on last year, when the global economic slump hit world demand and combined with a drop in local sector investment to trim the value of Sierra Leone’s exports by 20% to $79 million.

Exports for the first five months of 2010 stood at $35 million, nearly 25% up on the same period for 2009, and there was scope for them to rise further next year, Deputy Minister of Mineral Resources Abdul Ignosi Koroma said.
“Despite the fact that the industry is still affected by the economic downtrend in the diamond global market we still hope that it will pick up by 2011,” Koroma said in an interview.

The gain in export value follows a new export tax of 15% of the value of stones worth more than $500 000 and a law passed last November raising taxes on diamonds to 6.5% from 5%.

Traders at the time said the moves would simply encourage smuggling and be counter-productive in a country attempting to reverse years of economically debilitating mis-management and corruption after a 1991-2002 civil war.
“There are sometimes escape routes for smugglers … (but) I can assure the world that smuggling of diamond from Sierra Leone today is not an easy process,” he said.

During its civil war, diamonds mined in Sierra Leone helped finance rebels who murdered and raped civilians, and the stones became a global symbol of the most destructive impact of the exploitation of natural resources in Africa.

Since the war ended, resources firms have stepped up efforts to find and dig iron ore, bauxite and titanium ore rutile, as well as gold and diamonds, in a country ranked second from bottom of the United Nations’ Human Development Index.

Koroma said the country was looking in particular to step up production of gold, whose price has hit new records risen on world markets as investors seek safe assets.

Exports for the first quarter amounted to 3000 ounces valued at some $2.6 million, he said.