Political stability has led to a revival of economic activity, including in the natural resource sector. The rise of mineral prices until 2011 resulted in a surge of new mining licenses and exploration. However, in recent years, falling commodity prices and low currency combined with the 2014 Ebola outbreak has had a considerable negative impact on mining operations and economic growth.  Many of the mining companies have now ceased operations and left the country. Notwithstanding, the extractive sector remains the key driver of growth in these challenging times.

Prudent management of natural resources is a pillar of the national Agenda for Prosperity and there is strong commitment to align the EITI with these reforms. In 2012, Sierra Leone also launched an advanced online repository, making revenues generated from mining companies accessible to its citizens.

The Mines and Mineral Act (MMA, 2009) governs the mining sector, whilst the petroleum sector is governed by the Oil/Gas-Petroleum Exploration and Production Act (2011). The fiscal regimes for the extractive sectors are incorporated in the Income Tax Act (2000) (ITA) and its amendments, as well as the Finance Act (2015). The main fiscal tools in the mining sector are corporate income tax and mineral royalty. The main fiscal instruments in the upstream oil and gas sector are royalty and corporate income tax.

Contracts

The government of Sierra Leone does not have a contract disclosure policy. Information on companies’ shareholding structures is now available in its on-line Mining Cadastre Administrative System (MCAS). There are currently no state owned companies in the extractive sector in Sierra Leone.

Licenses

Licenses are allocated on a first come first served for mining and competitive bidding/licensing rounds for oil/gas. The National Minerals Agency is the principal point of contact for the general public in all matters to do with mineral rights. Some of the top licences include: London Mining Co Ltd, Koidu Ltd, African Minerals Ltd, Sierra Rutile Ltd, Sierra Mineral Holdings Ltd, A-Z Petroleum, SL Exploration, Lukoil, and Anadarko.

Sierra Leone has one of the best web based cadastre systems in West Africa. The Mining Cadastre Administration System (MCAS) provides information on licence holders, coordinates, application dates, and duration of licence in support of the NMA in the management of mineral rights. In addition to the MCAS, an online repository also provides information on (licence) payments made during the year.

Objectives of beneficial ownership transparency in Sierra Leone

• Due diligence in licensing and preventing conflict of interest
• Preventing transfer mispricing
• Transparency in ownership of extractive assets and rights help by PEPs
• Prevent corruption and illicit financial flows to help maximise revenues from extractives

Progress on implementing beneficial ownership disclosure 

Sierra Leone is collecting beneficial ownership information from the 20 largest extractive taxpayers. In addition, steps are being taken to support and improving the due diligence procedures employed by the National Minerals Agency and the Petroleum Directorate in order to make these government agencies better informed in their dealings with prospective commercial partners, and better equipped to lead to the systematic collection and recording of beneficial ownership data.

Sierra Leone EITI plans to organize a series of technical workshops to review current legal and institutional framework for beneficial ownership and build the capacity of relevant stakeholders for the implementation of beneficial ownership. Read Sierra Leone's beneficial ownership roadmap below for more information.

Iron-ore production remains the key contributor to Sierra Leone‘s GDP growth with over 17 bn MT in 2014 (USD 742m in export value). Despite the increase in production volume in recent years, export values have not increased correspondingly as result of the fall in commodity prices and the decline in the currency. Gold is mostly mined artisanally and presently production comes from alluvial deposits. Diamond is also been mined mainly from alluvial deposits at the Bo, the Kenema, and the Kono districts. Growth in diamond production was driven by improved world market prices of diamonds.

Mining leases have recently being granted to two large-scale gold producers and one iron-ore producer. Current exploration activity also indicates the potential for commercially viable and large-scale exploitation of natural rutile.

Several offshore oil discoveries have also been announced since 2009. Development of these reserves, which could be significant, is, however, years away.

The latest EITI disclosures (2014 Report) show that Sierra Leone received USD 58 million in revenue from its extractive industry operations. 85% of these revenues came from the mining sector, with the rest mainly stemming from exploration activities in the petroleum sector. Revenues were mainly collected through mineral royalties (57%), mining licences (9%)  and signature bonuses from the award of oil blocks (7%).