By Mohamed Jaward Nyallay
Stellar Diamond Company has been approved to start a multi-million dollar diamond drilling in Tongo.
Experts say the project could produce almost one million carats of diamonds over an 18-year period, and this will generate up to 327 million dollars in revenue.
The company which has another diamond drilling site in neighboring Guinea is optimistic about the potentials of this new deal in Tongo, even though the price of rough diamond has fallen globally. Last year the Baoule [Guinea] project cut its annual losses by almost 3million dollars, after losing 7million dollars the previous year.
Tongo is a small town located in the eastern district of Kenema. Over the decades it has been popularly known for its rich deposit of the precious stones.
There have been concerns about the environmental impact this project could have on Tongo. But these concerns seem to have been answered as the Environmental Protection Agency (EPA) has granted the license application of the mining company in February this year, according to reports.
Stellar Diamonds PLC is a London headquartered company. It has been present in Tongo for some time now but it only existed as an exploration company. In November 2015, it submitted a proposal to the National Minerals Agency (NMA) to transform the company to a diamond mining company; moving a step further from exploration.
Proposals to engage in mining activities in Sierra Leone are submitted to the NMA, which studies and passes them on to the Minerals Advisory Board (MAB). The board then advises the Minister of Mines on the approval or rejection of the proposal.
Shortly after Stella’s application last year, the Chief Executive Officer of the company, Karl Smithson, said: “As far as I am aware this is the first large scale mining license of any kind to be applied for since the onset of the Ebola crisis.”
This deal comes as a huge boost to the economy of the country, after World Bank figures suggest that the economy shrunk considerably last year due to the halt in mining activities. After the Ebola outbreak, Sierra Leone’s economy contracted by 20% due to the closure of major mining companies - African Minerals and London Mining.
The initial investment over the next four years by Stellar would be 24.8 million dollars. This investment will help this phase of the mining process bring the surface and underground management in to production. The company says it had already secured the funding for the mining operation to start.
It is not clear when mining operations will start in Tongo though. At the moment the paper work of the deal is yet to be signed and this will clear a way for the government of Sierra Leone and Stellar Diamond Company to agree on a fiscal deal.
In a country that has a very high unemployment figure, this deal could provide thousands of jobs for youths in the eastern province of the country.
(C) Politico 02/16/16
