By Chernor Sadu Barrie
Mining has been a staple industry in Sierra Leone since the 1940s, shortly after diamonds were discovered in the eastern regions of Kono and Kenema. Millions, perhaps billions of dollars have been mined from mineral deposits across every district in the country. Over the years, through Independence, dictatorships, civil war, natural disasters, and disease, the industry has never been stable. The ups and downs have rocked the country’s economy and been a bane rather than a boom to the people of Sierra Leone.
More recently, between 2012 and 2013, the Sierra Leone mining sector experienced a brief boom. According to Statistics Sierra Leone, in their “Foreign Trade Statistics Bulletin-2013”, the export value of minerals in 2012 was Le4,440,661,400. The bulk of the mineral exports in 2012 was from rutile and iron ore. In 2013, the value of minerals exports was Le7,729,620,600. In 2013, iron ore really took over the bulk of the mineral exports rising from Le1,550,747,400 in 2012, to a whooping Le4,613,287,500 in 2013. All of these increases were mainly as a result of African Minerals and London Mining.
But, Sierra Leone’s mining exports have dropped significantly after 21 March 2020, when the Lungi Airport was closed and an inter-district travel restriction was instituted on 28 April 2020, in order to prevent the spread of COVID-19 in the country. This global pandemic has had a significant economic impact on the mining sector in Sierra Leone, leading to mining products not moving out of the country, operational shutdowns, and mining licenses being withheld.
However, this is not the first time the mining sector has been hindered by circumstances beyond their control. In 2014 and up to 2016, the mining sector was hit by the Ebola epidemic, and the closure of iron ore mining companies like African Minerals and London Mining, who were the driving forces of the economy since 2011. These two giant companies were closed because of the Ebola epidemic, lack of finance, and the decline in iron ore price in 2014. The international price of iron ore dropped by nearly 50%… in China, from over $130 per tonne, to low as $65 per tonne as stated by Fastmarkets MB.
In 2016, the mining sector started showing some improvement because the Ebola epidemic had been conquered and iron ore mining resumed. In the 2016 report of SLEITI, mineral exports contributed about 2.7% to the national GDP, accounted for 91.1% of total exports, and over $26 million USD worth of royalties were paid to the government of Sierra Leone.
This improvement continued up to 2017. But, the extractive industry started facing challenges again in 2018, when the incumbent All People’s Congress (APC) were narrowly defeated in the March 2018 elections, by the Sierra Leone People’s Party (SLPP) headed by Maada Bio. During the new President’s first address to Parliament, he said his government would immediately review the Mines and Minerals Act 2009 and mining lease agreements, “…to ensure that they are in the interest of Sierra Leoneans.” After the statement of the president, and the appointment of a new Minister of Mines, all mining agreements came under scrutiny and mining sites began to close. In early 2019, less than a year after the general election, the license for SL Mining Limited, an iron ore mining company operating in Tonkolili, was cancelled by the government of Sierra Leone. The company was accused of flouting their mining lease agreement and mining license. Their matter is now before international courts and is yet to be resolved.
In the Sierra Leone Extractive Industry Transparency Initiative (SLEITI) reports of 2017 and 2018, the value of mineral exports dropped from $433.1 million USD in 2017, to $359.0 million USD in 2018. According to the document, this drop in the value of mineral exportation, was as a result of the closure of the Tonkolili iron ore mine throughout 2018.
With no new foreign investment in mining, no new companies operating in the country and no licenses issued, almost every mining site in the country has been closed as result of the COVID-19 pandemic. The mining sector and the economy of the West African nation has been crippled.
According to figure quoted by the Mines Minister, Foday Rado Yokie, mineral export revenue dropped from $2.24 million USD in April 2019 to just 0.33 million by April 2020. This almost $2 million USD drop in revenue has dealt a huge blow to the economy of Sierra Leone, as the country battles the spread of COVID-19.
The Minister of Mines was recently quoted in a Reuter’s story saying mining accounts for more than 80% of the country’s export revenue. He further stated, “We are praying things start up again in the next few months because the situation is very debilitating to the country’s economy.”
The Country Director of Baumin Gold Sierra Leone, Brima Conteh, said they have not been granted a license to mine and export minerals because of the COVID-19 virus. He said, “The Ministry of Mines and Mineral Resources withheld the license because of the restrictions on movement and told us to wait until after the pandemic disease.” He continued, “We are still at the exploration stage because of the COVID-19 pandemic and can’t move forward.”
Personnel at the Precious Minerals Trading Directorate of the National Mineral Agency (NMA), agreed to speak to the Media Information Bureau on conditions of anonymity for fear of reprisals. One staff member said between January 2019 to mid-March 2020, over $197 million USD worth of diamonds and over $2.5 million USD worth of gold were exported. That was before the onset of the coronavirus. He added, “For two months now (March – April 2020), no gold and diamonds have been exported as a result of the suspension of flights to and from the country.” In short, he said this has greatly affected revenue collection on gold and diamonds.
Two months into the COVID-19 pandemic in Sierra Leone, there is no end in sight for mineral exports. Donors continue to fund the disease response while revenues from mineral exports continues to stagnate. Is this “just another valley for the mining sector”, as the Minister suggests, or will the coronavirus be the final nail in the coffin for Sierra Leone mining?
This story was a collaboration with the Media and Information Bureau in Sierra Leone and New Narratives as part of the Excellence in Extractives Reporting Project. German Development Cooperation provided funding. The Funder had no say in the story’s content.