Investment in mining facilities is expected to bring new jobs and increase exports

Mining potential in Sierra Leone is huge. The country was once the world’s largest supplier of rutile (titanium ore), until production was halted by the war in the mid-1990s. The operator, Sierra Rutile, was the country’s largest exporter at the time.

Rutile production is expected to resume again later this year, providing a vital source of foreign exchange income. It symbolises the return of peace to the country and sends a clear message to other mining houses that Sierra Leone is back in business.

The successful development of the mining sector remains one of the most important objectives for the government, which is hoping to unlock the country’s wealth of natural resources, including its substantial diamond mining potential. There are numerous gold occurrences throughout the country, as well as bauxite, platinum and dimension stone. The resources are spread evenly throughout the land.

According to the Ministry of Mineral Resources, the industry has the potential to become the leading revenue generator in the country. A new mining investment code has opened the door to foreign exploration firms keen to exploit the largely untapped deposits. Investment in mining production facilities is expected to bring new jobs and raise the level of exports. The ministry wants the mining sector to return to the days when it represented as much as 20 per cent of gross domestic product – currently, it stands at around 10 per cent.

‘Looking to a bright future’ Alhaji Mohamed Swarry Deen

Alhaji Mohamed Swarry Deen, Minister of Mineral Resources, says that the new investment legislation offers private companies a whole range of tax breaks and other incentives. Corporate tax on mining operations, for example, has been cut from 37.5 per cent to 30 per cent.

There is also an efficient administration system to make participation as easy as possible for investors. This means speedy processing of exploration and production permits. Furthermore, the state does not insist on taking a share in mining operations. “The policy of the government is to make mining a completely independent sector operated by private enterprises,” he says.

The market is responding well. There is upturn in interest among foreign exploration houses – especially Canadian junior firms – that is expected to lead ultimately to an increase in minerals production. A good deal of exploration work has already been done, and some projects are entering the final development stage.
On the diamonds side, revenues are up amid increased activity and concerted efforts to curb smuggling, still prevalent in parts of the country. In 2000, Sierra Leone exported £6.25 million worth of diamonds, rising to £16.25 million the following year and then £25.6 million in 2002. The figures for 2003 are expected to continue the upward trend, as the government toughens its stance on illegal diamond mining.

Sierra Leone is also looking forward to the resumption of rutile production. The development of new production operations means the country is not far from joining the ranks of other west African gold exporters such as Ghana and Mali.
There is still plenty of room for growth. Investment in related infrastructure, particularly transportation, water and power, is expected to improve prospects for the industry. Investors currently have to build all supporting infrastructure themselves.

Mr Deen says the natural resource base of the country will always generate interest among investors. Now that peace has returned to the country, the government must drive home the message. “We are looking forward to a very bright future for the mining industry,” he says. “That is why we think that the government needs to spend a little more on mining in order to derive maximum benefit.”