Sierra Leone diamond exports down 28%

Exports of diamonds from Sierra Leone fell by around 28 percent in value year on year in the first half of 2009, according to official data seen by Reuters on Wednesday.

Shipments of the precious stones, the poor West African country’s main source of foreign currency, were valued at just under $36 million in the first six months of the year, down from around $50 million in the same period of 2008, figures showed.

Lower demand for diamonds among consumers whose disposable income for luxury goods has been reduced by the impact of the global financial downturn, as well as declining grades in easily accessible locations, are discouraging production.

“A lot of money has to be spent in diamond mining this time round in Sierra Leone because little can be done now in surface mining,” said Ibrahim Gina, manager of the government’s Gold and Diamond Office.

Average prices of diamonds on world markets are 18 percent down from their level at this time last year, according to data from independent news provider PolishedPrices.

Earlier this year, London-listed Target Resources said it was suspending diamond mining in the former British colony.

During its 1991-2002 civil war, diamonds mined there helped finance rebels who murdered and raped civilians, and the stones became a global symbol of the most destructive impact of the exploitation of natural resources in Africa.

Since the war ended, resources firms have stepped up efforts to find and dig bauxite and titanium ore rutile, as well as gold and diamonds, in a country ranked bottom of the United Nations’ Human Development Index.

“The country expects very low exports by the end of the year,” independent financial analyst George Turay said. “All the indications are that 2009 will be bad.”

Source: Reuters