Friday, October 25, 2013

THE STAR OF SIERRA LEONE-DIAMOND MINING AND ITS HISTORY


The 968.9-carat (193.8 g) Star of Sierra Leone diamond was discovered by miners on February 14, 1972 in the Diminco alluvial mines in the Koidu area of Sierra Leone. It ranks as the third-largest gem-quality diamond and the largest alluvial diamond ever discovered.  On October 3, 1972, Sierra Leone's then-President, Siaka Stevens, announced that Harry Winston, the New York City jeweler, had purchased the Star of Sierra Leone for under $2.5 million.  The stone was initially cut into an emerald shaped stone weighing 143.2 carats (28.6 g) but was later re-cut due to an internal flaw,  eventually resulting in 17 separate finished diamonds, of which 13 were deemed to be flawless. The largest single finished stone was a flawless pear-shaped diamond of 53.96 carats (10.79 g). Six of the diamonds cut from the original rough were later set by Harry Winston into the "Star of Sierra Leone" brooch.  The rough diamond was an enormous colorless and transparent crystal, which was subsequently cut into 17 stones, 13 of which were flawless and “top-color”.

A rare characteristic of the stone is its perfect chemical purity: it is ranked as a type IIa diamond, a category which includes less than 1% of all diamonds.  It ranks as the third-largest gem-quality diamond and the largest alluvial diamond ever discovered. The Star of Sierra Leone is considered as the most famous diamond unearthed from this place. The largest gem-quality diamond discovered previously in Sierra Leone was the 620-carat "Sefadu" diamond, found in 1970.

Diamonds of Sierra Leone have an international reputation as one of the highest gem quality diamonds in the world. The diamonds are so pure and free of inclusions that some of them are known as "glasses", clear, transparent and absolutely colorless. Being D-color diamonds, the Star of Sierra Leone diamonds are Type IIa diamonds, that are characterized as chemically pure (due the absence of impurities such as nitrogen, boron, hydrogen etc. which can cause color in diamonds) and structurally perfect (due to the absence of plastic distortions in the crystal, which can also impart rare fancy colors to the diamond) .

Sierra Leone's traffic in diamonds has left a trail of carnage. While they may seem a symbol of happiness, the reality of the gems is far from that.  What are conflict diamonds?  Conflict, or blood diamonds are mined in a war zone and sold, usually clandestinely, in order to finance an insurgent or invading army's war efforts.  The Kimberley Process is a joint government, international diamond industry and civil society initiative established in 2002 to stem the flow of conflict diamonds - rough diamonds that are used by rebel movements to finance wars against legitimate governments. The trade in these illicit stones has contributed to devastating conflicts in countries such as Angola, Cote d'Ivoire, the Democratic Republic of Congo and Sierra Leone.  The diamond industry estimates that conflict diamonds represent 4 percent of the total trade in rough diamonds. Others have estimated that conflict diamonds could amount to as high as 15 percent of the total trade.  In 2001, the diamond industry produced rough diamonds with a market value of $7.9 billion. At the end of the diamond chain, this was converted into jewelry worth $54.1 billion.

The mining industry of Sierra Leone accounted for 4.5 percent of the country's GDP in 2007 and minerals made up 79 percent of total export revenue with diamonds accounting for 46 percent of export revenue in 2008.  The main minerals mined in Sierra Leone are diamonds, rutile, bauxite, gold, iron and limonite.  Mining in Sierra Leone, especially diamond mining, has been seen as one of the key factors for instability in the country and one of the reasons for the country's recent civil war. Traditionally, benefits from diamond mining have ended up with private companies and corrupt officials rather than the country's government and people.  The Ministry of Mineral Resources is responsible for the management of the country's minerals sector and the Mines and Minerals Act 2009. Sierra Leone is a candidate for the Extraction Industries Transparency Initiative (EITI). GoSL publishes data on licenses and payments by mining companies in their Online Repository established by Revenue Development Foundation, the repository was launched in January 2012.

Organized mining began in the 1920s with bauxite first being recorded in 1920 along the Falaba to Waia road.  Diamonds were found in the early 1930s, from 1934 to 1956 the Sierra Leone Selection Trust (SLST) held the monopoly for mining, prospecting for and marketing diamonds throughout Sierra Leone. The Consolidated African Selection Trust Ltd (CAST), which owned mining operation around West Africa, provided the initial capital for the SLST.  The monopoly was originally given for 99 years but in 1955 the SLST gave up rights to alluvial deposits outside its lease area. This allowed artisan and small scale mining of alluvial deposits, and by 1965 there had been a large movement from agricultural work to working these deposits.  In 1970 a joint SLST and government organization was formed call the National Diamond Mining Corporation (NDMC).  Before the start of the Civil War in 1991 250,000 people made a living in the mining and quarrying sector with direct and indirect employment accounting for 14% of the country's total labor force. The mineral wealth of Sierra Leone, especially in diamonds, became a key factor in its instability and the outbreak of Civil War.  Despite being among the top-ten diamond-producing nations, the mining sector faces many challenges, including weak laws and smuggling issues.  Sierra Leone is losing large revenue that could have been earned from taxes and licensing agreements.  Those revenues could be reinvested for example in the healthcare sector to help those people whose health is affected by mining operations.  Research suggests 50% of Sierra Leone’s diamonds were smuggled annually.  NACE argues that with good institutional reforms, Sierra Leone can increase mineral exports seven-fold by 2020.  Sierra Leone’s mining performance is extremely poor as compared to Botswana, where mining contributes approximately 38% to their GDP.

Rutile
Sierra Leone is ranked as one of the top five producers of rutile, a titanium ore, used in paint pigment and welding rod coatings. The government issued leases for mining rutile are held by Sierra Rutile Limited which is owned by Titanium Resources Group which is owned by European and U.S investors. These leases cover 580 km2 of land where there are 19 identified deposits of rutile. In 2009 the Government of Sierra Leone received Le 1,854 million in royalties from rutile mining.  In 2009 production decreased by 19.07 percent to 63,860 tons, and exports were worth US$ 35,920,300. 

Gold
Gold mining in Sierra Leone consisted of small scale operation exploiting alluvial deposits.  After the end of the Sierra Leone Civil War exploration of gold grew and by 2013 to 2015 new modern mines are expected to be in production. In 2010 Cluff Gold, a British company, found gold deposits in the rocks of the southern Kangari hills and is planning to build a mechanized mine to extract it.  In 2009 production levels of gold fell by 17.71 percent to 5060 Troy Ounces (157 kg) from 6150 Troy Ounces (191 kg) in 2008. This was due to a drop in mining activity in the second half of the year and was despite a rise in the price of gold on the global market. The increase in the value of gold meant gold exports were worth 15.73 percent more at US$4,764,000 in 2009 compared to US$4,116,400 in 2008.

Diamonds
Diamonds are found in about a quarter of Sierra Leone in the south-east and east of the country, with the diamond fields cover 7,700 square miles. The main production areas are concentrated around the drainage areas of rivers in the KonoKenema and Bo Districts. In the Kono, Kenema, Bo and Pujehun Districts there are 1,700 artisanal mining licenses in operation.  In 2009 the government recorded exports of 400,480 carats (80,096 g) of diamonds, this included 143,620 carats (28,724 g) of industrial diamonds and 256,860 (51,372 g) of gem diamonds. This was an increase of 7.86 percent on the previous year which was a result of legislative changes, in the form of a new mining law, to enable fees and royalties to be collected more effectively and an increase in the amount of diamond mining. Diamond exports were worth US$ 78,373,900 in 2009 accounting for 59 percent of the country's exports. The drop in the value of diamonds on the world market meant that the value of diamond exports decreased by 20.68 percent in 2009 compared to 2008.  The largest diamond found in Sierra Leone, and the third largest diamond in the world, was a 969.8 carat (194 g) rough diamond. It was found in the 1972 and named the Star of Sierra Leone.

Sierra Leone should have been one of the world’s richest countries, being blessed with resources, including gold and diamonds. However, it remains one of the world’s poorest countries, ranking 203 out of 206 countries by World Development Report.  Wealth that diamonds should have brought is not evident, and Sierra Leone is still emerging from scars from the recent brutal Sierra Leone Civil War, which was fuelled by illicit diamond trading. Revenue from mining in Sierra Leone has not been redistributed to benefit the larger population.  The mining industry contributed 4.5% towards its Gross Domestic Product (GDP) in 2007. Economic development is low due to poor management of resources and unrealized potential revenue.

Bauxite
Sierra Leone's production of bauxite, an aluminum ore, is around one percent of the total global production. Deposits occur between Moyamba and Mano, on the Freetown Peninsular, at Krim-Kpaka in the Pujehun District, southern Sierra Leone; in north on the road from Falaba to Waia, at Kamakwie and MakumreSierra Minerals Holdings is the only company mining bauxite in the country, and the second largest employer in the mining industry.  It runs the Sieromco Bauxite Mine as well as holding the mining lease to 321.7 km2.  In 2009 production of bauxite fell by 22.17 percent to 742,820 tons. This was due to Sierra Minerals ceasing production from June to September 2009 as a response to falling global demand for aluminum, which is produced from bauxite.

Iron
Mining for hematite iron ore recommenced at Marampa mine on 11 February 2010 after 35 years. The mine is owned by London Mining which also owns an exploration license covering 319 km².  The Tonkolili region hosts the biggest iron ore deposit in Africa and the third largest in the world, exploited by African Minerals, in the hills around Bumbuna, Mabonto and Bendugu.

I’m not much of a miner, but all of the above seems to be a plus for a country.  A way of means to get the country out of poverty and to look towards a brighter future.  With all its assests, why is the country still floundering and ranked in the bottom 10 in the world ranked on its GDP?
Hmmmmm food for thought.  



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