Sierra Leone

Sierra Leone emerged from a decade of civil war in 2002 and is showing signs of a successful transition, with the first democratic elections carried out successfully in 2007. Investor and consumer confidence continues to rise and the recent increase in political stability has led to a revival of economic activity, with the country’s main exports being diamonds, rutile, cocoa, coffee and fish.

The mining of diamonds, bauxite and rutile provides the major source of hard currency and agriculture employs two-thirds of the country’s 5.2 million strong population and produces roughly half of the country’s GDP. Sierra Leone’s manufacturing sector continues to develop and consists mainly of the processing of raw materials and of light manufacturing for the domestic market. While it possesses substantial mineral, agricultural, and fishery resources, its physical and social infrastructure is not well developed.

Diamonds were first discovered in the Kono district in 1930. Subsequent exploration defined extensive alluvial diamond fields, with an exceptionally rich group of deposits in the Koidu area. In addition to alluvial deposits; known kimberlite pipes and fissures at Koidu are reported to contain some 6 million carats to a depth of approximately 600m, the majority of these stones being of gem quality. It was in this region that the Star of Sierra Leone was discovered, the world’s third largest ever gem diamond at 968.80 carats in the rough.

In 2007, the country produced 371,260 carats worth some US$98.7 million.

Mining and fiscal regime

Company Tax / Corporate Tax Mining

37.5%

Second Tier Taxes

14.0%

Mining Royalty Tax

None

Mining Royalty Tax

No comment

Industrial Tax (on total sales revenue)

None

Commercialisation Tax (Sales Tax)
(on total sales revenue)

None
 

Discount to Government
(on total sales revenue)

None
 

Rough Diamond Export Levy

5%

Rough Diamond Export Levy

No comment

Exploration diamond export royalty

6%

C&P diamonds valuation fee on rough

3%