Dauda A. Kuyateh (PhD)
Senior Economist, Ministry of Finance
Sierra Leone’s recent mining reforms and regulations represent a significant advancement in the nation’s approach to resource governance and beneficiation. The Honorable Minister of Finance is spearheading initiatives to establish a Mineral Wealth Fund, with the full support of the President. This effort aims to shift the narrative surrounding the management of the country’s mineral resources—moving away from past practices since independence—toward a more comprehensive framework for beneficiation. By striking a balance between regulatory measures and investment incentives while ensuring community benefits, the Government of Sierra Leone aspires to cultivate a more sustainable and equitable mining sector. This approach is intended to generate vital revenue, stimulate economic growth, and create job opportunities.
As a nation rich in diamonds, iron ore, bauxite, and an expanding portfolio of critical minerals, Sierra Leone stands as a crucial player in both regional and global mining markets. The outcomes of these reforms will not only shape the nation’s economic trajectory but also have the potential to influence approaches to resource governance on a broader scale.
It is imperative to emphasize that the success of these mining reforms will hinge on effective implementation, ongoing stakeholder and community engagement, and the capacity to adapt the framework in response to emerging challenges and opportunities within Sierra Leone’s dynamic and rapidly evolving mining sector.
For many decades, concerns have been raised about the perception that the country’s vast mineral wealth is not benefiting its citizens. The diamonds, gold, iron ore, bauxite, and rutile extracted from our land must serve to improve the lives of Sierra Leoneans by funding education, housing, and job creation. Striking a balance between reform and openness to partnerships, while advocating for a greater government stake in its resources, is crucial for fostering local ownership and ensuring beneficiation within Sierra Leone’s extractive industries. It is difficult for anyone with a genuine love for their country to accept the current situation, where we receive a mere 3% return from our abundant mineral resources, while private individuals, many of whom are foreigners, profit immensely from our land. Therefore, there is an urgent need to review and reform our mining and mineral policies, alongside a call for increased accountability and transparency in the management of mineral revenues. We must change this model to facilitate real development in our beloved Mama Salone, and we need to take action now.
The fundamental question we face today is whether citizens genuinely benefit from our mineral resources. Are these minerals and natural resources a curse or a blessing? Does the wealth generated from mining actually benefit the majority? Why, despite having abundant mineral resources, do we still find ourselves in a state of poverty? Each of these inquiries demands evidence-based answers.
Our pragmatic, focused, and results-driven Honourable Minister of Finance, Sheku Ahmed Fantmadi Bangura, has taken decisive action to reshape the mining and mineral sector, which has long faced numerous challenges related to governance and revenue. With the introduction of the new framework for national participation in mining under the Mines and Mineral Development Act of 2022, the government is granted a 10% free carriage undiluted interest in all large-scale mining projects and up to a 35% equity stake in joint ventures. This development is widely viewed as a positive step forward. Many believe that the implementation of the Sierra Leone Mines and Mineral Development Management Corporation and the Mineral Wealth Fund will enhance the mining sector’s performance in terms of revenue generation, stability, job creation, GDP growth, and sustainability.
The Mines and Minerals Development Act of 2022
Being an act to repeal and replace the Mines and Minerals provisions for exploration, mines and minerals development, sale and export for socio economic benefit of the people of Sierra Leone, to provide for the facilitation of transparent and accountable management of the mineral sector in accordance with international best practice; to provide for improved employment and employment practices in the mineral sector; to provide for improved welfare of communities affected by exploration, mining and related activities; to provide improve welfare; to provide for more effective measures to reduce the harmful effects of exploitation and mining activities on life, property and the environment and to provide for other related matters.
The Mines and Mineral Development Act 2022 presents an opportunity for a more equitable distribution of mining benefits, enabling direct revenue flows to local communities. This could address historical grievances and alleviate tensions associated with mining operations and the communities they impact.
By fostering improved community relations, the Act has the potential to minimize operational disruptions and social conflicts that have, at times, hindered mining projects in Sierra Leone, thereby creating a more stable operating environment.
Sierra Leone is undeniably rich in vital mineral resources that, if managed effectively within the proper policy framework, legal structure, and regulatory environment, can transform the nation. This transformation can lead to economic prosperity characterized by inclusive growth, job creation, and a poverty reduction. Despite the significant wealth generated from its abundant mineral resources, including diamonds, gold, bauxite, iron ore, rutile, heavy mineral sands, and critical minerals such as lithium—a globally sought-after commodity—these advantages have not translated into improved livelihoods for mining communities. Instead, the benefits have predominantly flowed to a privileged few. For instance, in 2024, the nation generated US$1.5 billion from mineral exports; however, without crucial structural reforms, there remains a considerable risk that the country will continue to be rich in resources yet poor in benefits.
Regrettably, while Sierra Leone’s mineral sector has generated nearly US$4 billion in export earnings over the years, less than 5% of that revenue has been reinvested into vital development sectors such as education, healthcare, and infrastructure.
It is crucial to recognize that these mineral deposits are viewed as strategic national assets. They have been entrusted to the Sierra Leone Mining and Mineral Development Management Corporation and the Mineral Wealth Fund to promote sustainable development and generate revenue. Thus, the Sierra Leone Mining and Mineral Development Management Corporation was created, supported by the government-owned private sector entity, the Mineral Wealth Fund (MWF). This structure ensures that mining operations remain financially independent of the national budget. The Minister of Finance believes the advantage of the reform is not only for revenue generation but also the management of national wealth in a responsible manner.
The recent land ownership dispute and lease controversy involving the Government of Sierra Leone and Gento Group of Companies concerning the Kassafoni land has taken a significant turn. With the firm position taken by the Honourable Minister of Finance to restore sanity and legitimacy in the mining sector for national interest, balancing investment and local benefits of landowners and mining communities, positive results are beginning to emerge, with Gento Group voluntarily relinquishing its rights to the Kassafoni land, allowing the Government to assume full ownership and control. This development represents a major victory for the reformed sector and for the three chiefdoms in Tonkolili and Koinadugu districts. The achievement is further underscored by the signing of land lease agreements by the Minister of Finance with the landowners of the Kassafoni iron ore deposits—namely, the Diang, Sambaia, and Dansogoia chiefdoms. This marks a significant step forward in the government’s vision for meaningful participation in the mining sector.
Balancing Investment and Local Benefits
One of the most pressing challenges confronting Sierra Leone’s mining sector is the need to maintain an attractive investment climate while simultaneously enhancing community benefits and increasing government revenue. The country faces the task of competing with other mining jurisdictions while instituting reforms that amplify the local share of mining wealth. Achieving this delicate balance necessitates careful calibration of fiscal terms, regulatory requirements, and beneficiation agreements.
Moreover, there is the ongoing challenge of ensuring that reforms yield their intended outcomes for community development. Historical evidence indicates that even well-crafted benefit-sharing systems can encounter implementation difficulties, risks of corruption, and capacity limitations at the local level.
Sierra Leone’s mining reforms are not occurring in a vacuum; they are part of a broader regional trend toward resource nationalism and the maximization of local benefits.
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Concluding Thoughts
We must commend the Honorable Minister of Finance, Sheku Ahmed Fantamadi Bangura and team, for the government’s renewed participation in the mining sector, exemplified by the establishment of the Sierra Leone Mines and Mineral Development and Management Corporation, the Mineral Wealth Fund, and recent enhancements to the legislative and regulatory frameworks aimed at improving governance, stakeholders engagement and revenue in Sierra Leone’s mining and mineral resources sector. Notably, the reinforced legal protections for indigenous mining communities concerning land ownership and rights represent a significant advancement. Moreover, the strengthened governance framework for resource management has the potential to enhance Sierra Leone’s overall economic governance, creating positive spillover effects in other sectors and improving public financial management.
