Sierra Leone Is Trying to Turn a Diamond Reputation Into a Minerals Business

SIERRA LEONE · MINING

Sierra Leone wants a new reputation. It is betting on iron ore, a newly financed gold mine and offshore gas interest to replace the memory of blood diamonds.

President Julius Maada Bio’s government says growth will ease this year, even as mining exports keep climbing. Inflation, unfortunately, is doing the opposite of what officials would like.

What the Sierra Leone critical minerals push consists of

Iron ore is the real driver here, not anything exotic. It made up 69 percent of mineral exports in 2025.

Kingho Mining works the Tonkolili deposit. Marampa Mines works the nearby Marampa deposit.

A $230 million magnetite processing plant broke ground at Tonkolili in April 2025 and remains under construction. Concentrating ore before export raises its value per tonne and eases the shipping costs that have long hurt West African iron.

Gold is the second leg of the plan. The Baomahun project closed $430 million in financing on 1 December 2025.

The deal was led by the Africa Finance Corporation (AFC) and Afreximbank, a Cairo-based bank that funds African trade.

Two African development banks underwriting a mid-sized gold mine is a different capital structure from the usual Western or Chinese route. But construction at Baomahun has only just started.

First gold is not expected for a year or more. Sierra Leone’s total mineral exports still reached $1.3 billion in 2025, up 16 percent on the year before.

Offshore, and the pipeline nobody has built yet

Shell signed a reconnaissance permit on 22 April, covering 19 offshore blocks totalling about 20,600 square kilometres. A reconnaissance permit allows surveys only; it is not a licence to drill.

West African offshore exploration has a long history of expensive disappointment. Sierra Leone’s own earlier searches found hydrocarbons without finding volumes worth pumping.

The regional context matters more than the acreage. Leaders of the Economic Community of West African States (ECOWAS), a 15-country bloc, signed an agreement in Freetown on 19 July.

It backs the proposed African Atlantic Gas Pipeline, a project still years from construction.

That pipeline would carry gas from Nigeria up the coast to Morocco, and on towards Europe. The route has been discussed for years without construction starting.

Hosting the signing still gave Freetown a seat at a table it does not usually sit at.

The macro picture is mixed, not simply improving

Real GDP grew about 5.0 percent in 2025, beating earlier forecasts. The International Monetary Fund (IMF) now expects growth to slow to about 4.0 percent in 2026.

It blames higher fuel prices, linked partly to the war in the Middle East. Sierra Leone is also running an IMF loan programme, whose board completed a review and approved new climate financing in June 2026.

Inflation is the harder problem. Average inflation is projected to rise from about 7.6 percent in 2025 to roughly 9.3 percent in 2026.

The year-end rate is expected to reach near 11.6 percent. The IMF does not see prices back in single digits until the end of 2027.

Mining revenue is the genuine bright spot. Government income from mining licences and royalties rose 13 percent to $55.8 million in 2025.

That figure is projected to reach $65 million to $75 million in 2026. It is real money for a small national budget.

Growth is holding up better than expected. Inflation is the number officials still have to bring under control.

The infrastructure that decides whether any of it works

Sierra Leone’s constraint has always been logistics rather than geology. Ore that cannot reach a port cheaply is not a resource.

Investment is going into port capacity and a bridge between Lungi and Freetown. The African Development Bank, the World Bank, the European Union (EU) and the Millennium Challenge Corporation are financing the work.

The Lungi crossing is a specific and long-standing problem. The international airport sits across an estuary from the capital, and the journey has deterred business travel for decades.

These are not glamorous projects. But they are what determine whether the mining numbers are achievable.

Power is the other binding constraint. A magnetite plant is a heavy electricity user before it is anything else.

Changing what a country is known for

Sierra Leone’s international image was fixed by the diamond wars of the 1990s, and it has proved hard to shake off. Films and news coverage kept the “blood diamond” label alive for decades after the fighting ended.

That reputation is itself a cost of capital. Investors price in risk they associate with a country’s past, not only its present numbers.

Diamonds are genuinely fading in the export numbers, not only in the government’s talking points. Weak global demand for luxury goods has left major diamond operations on maintenance status through 2025.

Iron ore, gold and bauxite are what is actually growing. The Mokanji bauxite project is expanding output from 6.3 million tonnes to 11 million tonnes a year.

Comparing the region helps explain the strategy. Ghana has struggled to stop illegal gold mining in its forests, while Liberia is rebuilding around one large iron ore investor.

Sierra Leone is trying something different. It is spreading bets across several medium-sized projects instead of one anchor, financed largely by institutions with an African mandate.

No single mine closure can sink the economy this way. No single project is big enough to transform it either.

What to watch next

The first thing is actual shipped tonnage from Marampa and Tonkolili, not nameplate capacity. Mineral exports rose 16 percent in 2025, and 2026 will show whether that pace holds.

The second is whether Baomahun’s construction stays on schedule after its December 2025 financing close. First gold will be the clearest test of whether this African-led financing model works.

The third is the Lungi bridge and port works, because everything else depends on them. Multilateral lenders are already committed, but construction timelines in the region often slip.

Frequently Asked Questions

What is driving growth in Sierra Leone?

Mining is the main driver, and iron ore alone made up 69 percent of mineral exports in 2025. Real GDP grew about 5.0 percent that year, with a slowdown to about 4.0 percent expected in 2026.

Who is financing the Baomahun gold project?

The Africa Finance Corporation and Afreximbank led $430 million in financing that closed on 1 December 2025. Construction has just begun, so gold is not yet being exported.

What did Shell sign in Sierra Leone?

Shell signed a reconnaissance permit on 22 April, allowing geological and geophysical surveys across 19 offshore blocks covering about 20,600 square kilometres.

Is inflation falling in Sierra Leone?

No. Average inflation is forecast to rise from about 7.6 percent in 2025 to about 9.3 percent in 2026, with year-end inflation near 11.6 percent, before easing in 2027.

What is the African Atlantic Gas Pipeline?

It is a proposed pipeline that would carry gas from Nigeria to Morocco along the West African coast. ECOWAS member states signed an agreement supporting it in Freetown on 19 July.

Connected Coverage

The regional mining picture also runs through Ghana’s illegal mining problem and Liberia’s mining-led growth without jobs. All of it sits inside Africa: The New Scramble.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

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