Sunday, August 13, 2006

Diamonds Blind Workers to Gold

Diamonds are now at the heart of a  burgeoning postwar mining  sector, but geologists say Sierra Leone's untapped gold potential may even exceed that of diamonds. Gold has been uncovered in the north, east and south of the country, but the size of the deposits is not yet known. No gold mining licences have been issued and there are no official exporters - even though the Ministry of Mines and Mineral Resources reported 2005 exports of some pounds 131,000. The government says it does not know how much gold is being produced. But it suspects production and exports are far greater than the amount being declared. "Perhaps the rest is being smuggled," said Mohamed Mansaray, director of the Geological Surveys Department. In the absence of a regional single currency, gold allows trade between the poor nations of West Africa, offering security from the vagaries of local exchange rate fluctuations. With no manufacturing industry of its own, Sierra Leone buys light manufactured goods from neighbouring Guinea, and experts say much of its gold heads north over the border in return. That means the treasury misses out on any export levies, which could help fund government efforts to rebuild the country. One mineral sector observer said the government may be reluctant to interfere in such informal transactions for fear of upsetting cross-border trade, which is essential to meet local demand and which provides a livelihood for thousands of traders. "But it's also possible that some people are getting a cut from trade between the two countries, or that gold is being exported illegally from Sierra Leone which would explain the low export figures," said the observer. Widespread government corruption is generally believed to be rife.