Sierra Leone's only underground diamond mine has sold its first
gems, bringing it a step closer to full-scale production and a stock
market listing next year, one of its parent companies has said.
Stellar Diamonds, majority-owned by Mano River Resources, said its
Kono Kimberlite Diamond Project joint venture sold 1,049 carats at a
sale last week.
Petra Diamonds owns 51 percent in the Kono project.
The Kono project is working under an exploration licence but plans
to apply for a full diamond mining licence next year, Stellar Chief
Executive Karl Smithson told Reuters this week.
Smithson did not give the total value of last week's sale, but said the largest diamond, at 10.55 carats, raised $31,000.
The Kono project is the first underground diamond mining scheme in
Sierra Leone, charting the length of kimberlite dykes beneath the
surface in the diamond-rich east of the country.
Currently mining at up to 65 metres depth from two shafts, the
company hopes to dig down to 120 metres, requiring underground railway
tracks and ventilation systems.
"It's pioneering stuff in this country," Smithson, who worked for
10 years as a geologist with the world's biggest diamond company, de
Beers, told Reuters in an interview on Sunday.
"We need to test for another three to six months, which probably
involves another three sales, but we're quite confident that we're
going to get over $200 per carat. That's very good, very high value,"
he said.
The Kono mine, like Stellar's wholly-owned Mandala alluvial
prospecting operation in neighbouring Guinea, expects to starting full
production next year.
Stellar hopes Kono's revenues will eventually earn about $40
million a year, paying $14 million a year to the cash-strapped Sierra
Leone government in taxes and royalties.
"We've got 300 Sierra Leonean staff on this project and that's going to double in the future," Smithson said.
Staff are trained in rock drilling, blast cuts and other skills, a
boon in a country ranking last in the U.N. Human Development Index
where up to two-thirds of people are jobless.
"The local labour force is great -- intelligent, eager and very
hardworking. Some of the shifts are now run totally by Sierra Leoneans
without expats. They see an opportunity and they're taking it with both
hands."
POLITICS TOUGH BUT IMPROVING
Mano River Resources entered Sierra Leone at the height of the
1991-2002 civil war, which killed around 50,000 people and involved
multiple atrocities committed by child soldiers.
Stellar is raising 2 million pounds from European and British institutions and wealthy investors.
"Investors used to think we were crazy but there's a bit of a
different perception of the whole region now. We knew the politics was
tough but politics improves over time and the geology stays the same,
so we targeted these areas," he said.
"The big companies are looking for monster mines and they don't
feel that they're here, but there are still plenty of medium and small
mines that can be viable for a company such as ourselves. We have
first-mover advantage."
The government is reviewing all mining contracts, which Smithson said would clear out inactive licence holders.
Stellar is also prospecting at four other diamond mines in southern
and eastern Sierra Leone, as well as Guinea and the Democratic Republic
of Congo.
"We hope to have two producing mines in 2009," said Smithson.
