Monday, August 20, 2007

Sierra Leone set to cut gems

FREETOWN - Sierra Leone is turning attention to processing its uncut gemstones as it pieces together its shattered mining sector after a 10-year civil war fuelled by so-called "blood diamonds".

For years, the diamond-rich west African country has mined diamonds and exported them raw, but as the industry gradually edges its way up back to pre-war levels, focus is now on "beneficiation" as it is known in the industry.

A new law was recently passed to license and monitor the cutting and polishing of rough diamonds, a gem first mined in the 1930s in Sierra Leone.

"There is no cutting going on at the moment, but the government has adopted a policy to add value to most of our minerals, including diamonds," Mines Minister Swarray Deen told AFP.

But the plan is not without hurdles.

Sierra Leone’s leading mining consultant, Andrew Kilie, says huge amounts of the stone are required to sustain a cutting and polishing plant.

Skilled workers to do the work are also not readily available in the impoverished country rated the second least developed in the world.

"In cutting diamonds you need volumes of stones, and the skills to do it. The skills base is not there," said Kilie.

He said most of the small-scale producers and alluvial panners who produce around 80 percent of the country’s diamonds are organised into cartels which sell to markets abroad.

Some of the producers are backed by the foreign buyers for whom they have set quotas.

"So to convince the dealers to sell locally is not going to be easy," said Kilie.

"We are not saying it cannot be done, but it is complicated," he added.

Government director of mining Alimany Wurie said local exporters have made a pledge to sell to local cutters.

"The availability of diamonds on the market could be one challenge, although exporters have made a commitment to sell to local cutters," said Wurie.

Increased revenue on government levies and job creation have been the motivating factors behind promoting diamond cutting and polishing.

If polishing takes place inside the country, "it creates employment and results in increased revenue to government," said Wurie.

Government levies a 3.0-percent tax on all diamond exports and processed stones fetch a higher value and more revenue.

But since cutting and polishing is not labour-intensive, few in Sierra Leone - reeling under a 70-percent unemployment rate - are to reap benefit directly from the planned venture.

Even if polished here, not many of the stones are likely to be used here.

A Freetown jeweller said diamonds were not appreciated in Sierra Leone.

"Ordinary Sierra Leoneans know or have heard about diamonds, and that they are valuable, but they prefer to invest in land and property than diamonds," said Riad Hassan, who runs one of the very few jewellery shops in Freetown.

"And in any case, many cannot afford it," said Kilie.

The Times - Article