This is a best prospect industry sector for this country. Includes a market overview and trade data.
Sierra Leone is well known for its vast endowment in minerals which include diamonds, rutile, bauxite, gold, iron ore, limonite, platinum, chromite, coltan, tantalite, columbite, and zircon, as well as promising petroleum potential. In the 1990s, the 11-year civil war funded with revenue from the minerals sector engulfed the country, resulting in widespread killing, the destruction of infrastructure, and a severe contraction in the economy. The sector was also greatly affected by the dual shock of the drop in iron ore prices and the Ebola epidemic in 2014.
Mining has been the mainstay of the economy since independence and the government has remained heavily dependent on mineral resources over the years. Mining contributed 0.7 percent to GDP, constituted 65 percent of export earnings, and 3 percent to employment in 2018. The government established the National Mineral Agency under the Ministry of Mines and Mineral Resources in 2012 with a mandate to implement clear policies and regulations, enhance transparency and accountability and ensure mineral resources support economic and social development. Sierra Leone became a member of the Kimberley Process in 2003 to protect the legitimate trade in rough diamonds, and in 2007 enacted the Diamond Cutting and Polishing Act to issue licenses entitling the holder to buy, deal in, export, import as well as cut, polish, crush and set diamonds for trade. In 2006, Sierra Leone joined the Extractive Industry Transparency Initiative (EITI) to improve governance and revenue management in the extractive sector.
In Sierra Leone, mineral licenses are available for five types of rights – reconnaissance, exploration, artisanal, small-scale, and large-scale mining, with artisanal activities reserved primarily for nationals. Licensed holders must mine in the area specified by the license, invest at least one percent of their gross revenue in developing the communities in which they operate, and give preference to local products and domestically incorporated companies over others. Mining fees and renewals are subject to annual charges, and royalties are assessed on the market value of the extracted minerals. License holders agree on lease rent with the owner or lawful occupant of the land and must follow the proportion specified in the Mines Act. To commence mining, an environmental impact assessment license valid for 12 months must be secured from the Environmental Protection Agency and firms must provide a healthy and safe working environment for workers.
The government’s drive is to improve integrity in the mining sector and ensure the country maximizes gains from its mineral resource endowments. It established the National Minerals Agency in 2012 and the Environment Protection Agency in 2008, enacted the Mines and Minerals Act of 2009, and the Public Financial Management Act of 2016, and the Extractive Industries Revenue Act of 2018 to improve transparency and accountability in the minerals sector. In 2018, the government approved the Sierra Leone Minerals Policy, the Artisanal Mining Policy, and the Geodata Policy, and currently awaits the interpreted report of a geophysical survey that collected data in 2019 on the type, quantity, and location of minerals in the country.
Mining activities require machinery and equipment, construction, and other services, which presents the best prospects for U.S. companies as their importation is on the rise. Companies with expertise in geological and exploration services, feasibility and engineering services, equipment and plant maintenance and repair, and spare parts for mining equipment can find this sub-sector attractive and rewarding. Mining consumables including explosives, tires, and lubricants are also in high demand. Construction services are key, especially for exploration companies expected to set up the peripheries to commence work.
Investment opportunities exist for U.S. companies using the most advanced technology to access and export minerals.