Sierra Eye: Sierra Leone diamond exports to set record

Diamond exports from Sierra Leone this year are on track to reach their highest level since the end of a 1991-2002 civil war by topping $160 million, a senior mining official said.
In the first seven months of 2007, Sierra Leone exported 448,988 carats worth a total of $102 million, $25 million more than during the same period last year, according to figures from the Gold and Diamond Office, which values all gem exports.
At that rate, the value of exported diamonds could reach $175 million by the end of the year, $50 million more than in 2006. Even conservative estimates suggest a record-breaking output.
"We set a target of $132 million for the year, but we now think we are leading for $160 million," Andrew Keili, Acting Director of the Gold and Diamond Office, told Reuters late on Thursday.
Sierra Leone is known for the smuggled "blood diamonds" that fuelled its brutal civil war and shocked the world with images of drugged child soldiers and horrific amputations.
The poor West African country held its first presidential and parliamentary elections on Saturday since U.N. peacekeepers left in 2005. Results are still trickling in.
Today more than 70 percent of people live below the poverty line. Most diamonds exported from the former British colony are still found by artisanal miners who pan for days, knee-deep in muddy waters, in the hope of striking it lucky.
"We have 200,000-to-300,000 artisanal diamond miners," said Keili. "If you multiply that by the number of their dependents, that's a hell of a lot of people depending on diamonds."
"What Sierra Leone really needs is to use the money from its natural resources for the development of the economy. I won't say diamonds have been a curse to Sierra Leone, but I would say we have not used the resources well."
CORRUPTION WORRIES
Concerns were raised last year when the diamond export figures dropped unexpectedly to $125 million from a post-war high of $142 million in 2005. Keili said improvements in 2007 were largely down to the impact of efforts to reduce the channels for smuggling.
"After the war more areas became accessible for mining, and the Kimberley Process has kicked in, making it much harder to smuggle," said Keili. "Even if there were some diamond smuggling going on, it would not be significant."
All gems exported legitimately receive certificates from origin countries as part of the Kimberley Process, begun in 2002.
Sierra Leone has set low export duties on artisanal stones of just 3 percent in the hope of dissuading smuggling. But small-scale mechanised mining companies, which use bulldozers and water pumps to sort through diamond-rich earth, must pay a 6 percent royalty.
Experts suggest some small-scale companies are diverting their diamonds through other routes, such as artisanal mining chains, to avoid the higher rates.
After neighbouring Liberia lifted its ban on diamond mining last month, efforts are underway to coordinate taxes and mining policy throughout the sub-region.
Sierra Leone is also taking steps to join the UK-led Extractive Industries Transparency Initiative (EITI), which would ensure that government and mining companies publish all payments that pass between them.