Sierra Leone is rich in mineral resources. Diamonds, gold, bauxite, rutile and iron ore are known to exist in large quantities. According to CIA-World Factbook, political stability has led to a revival of economic activity such as the rehabilitation of bauxite and rutile mining, which are set to benefit from planned tax incentives. A number of offshore oil discoveries were announced in 2009 and 2010. The development on these reserves, which could be significant, is still several years away.The rise of mineral prices in recent years has led to strong interest by international mining companies in Sierra Leone, resulting in a surge of new mining licenses and exploration. The mining sector now contributes about 30% of the country's GDP, though the vast majority of this is artisanal, and is still illegal. According to the USGS, diamond remained the most significant mineral commodity to Sierra Leone’s economy. The country was the world’s 10th ranked producer of diamond, by volume, in 2010 and the world’s third ranked producer of rutile.
Mining is a focus of the reform agenda, and a review of mining contracts is being undertaken. The government is considering establishing a diamond-cutting and polishing industry in order to add value to exports. The fiscal contribution of the extractive sector is still limited. From 2006 to 2010, the average annual revenues from the sector is around US $7 million. The most recent EITI Report reveals that Sierra Leoneans receive around US $1 per capita in fiscal revenues annually from the extractive sector.
The Board on 26 February 2013 suspended Sierra Leone. The Board also recognised the significant process achieved and asked Sierra Leone to complete four remedial actions. The suspension will be lifted if the Board is content that the remedial actions are satisfactorily completed. If suspension is in effect beyond 27 February 2014, the Board will consider delisting. Completing the remedial actions could be challenging if swift action is not taken in coming weeks, including ensuring all material payments and revenues are covered.
1) In accordance with Requirement 11, the government is required to ensure that all relevant companies and government entities participate in the reporting process. The Board noted the efforts underway to clarify the significance of the payments from companies that did not participate in the 2010 report, and the local government entities that did not report revenues. The Board highlights the suggestion in Requirement 11(b) that where a number of small operators pay revenues which are individually not material, but collectively material, the government discloses the combined benefit streams from such small operators.
2) In accordance with Requirement 13, the government ensures that the disclosures from government entities are based on accounts audited to international standards. The Board recommends that the MSG agrees a strategy to address this issue, with particular emphasis on the sub-national entities.
3) In accordance with Requirement 14, the government ensures that all material companies comprehensively disclose all material payments in accordance with the agreed reporting templates. Where companies are no longer operating in the country, the government should unilaterally disclose all payments received.
4) In accordance with Requirement 15, the government ensures that all government agencies comprehensively disclose all material revenues in accordance with the agreed reporting templates .
These corrective actions could be addressed by publishing a supplementary 2010 EITI Report, or through the 2011 EITI Report to be published before 31 December 2013.