Gold and GemStone Mining Inc., a gold and diamond exploration and development stage mining company focused on Sierra Leone, West Africa, has commented today on the growing economic opportunity within the mining industry of the Country in which it plans for full scale alluvial mining operations to begin in Q2 2013.
Sierra Leone has emerged as one of the most stable countries on the African continent. Its democracy is thriving, the economy is growing and the climate for investment is being transformed. With its verdant land, stunning beaches, fertile seas, vast mineral resources and innovative people -- Sierra Leone is truly a land of opportunity.
Included in the top ten tourist destinations to visit in 2009 as published by the Lonely Plant, the country has not only benefited from increasing tourism but has continued to attract significant attention from global business and investors alike. In an annual survey conducted by the World Bank across a total of 183 Countries, the level of Investor Protection Sierra Leone, ranked 29th out of 183, was higher than a number of developed Western European Countries including Germany and Switzerland and ranks alongside Denmark & Sweden and on average 40% higher than the rest of Sub Saharan Africa. Sierra Leone also ranked a respectable 79th out of 183 in the ease of starting a new business.
Oil, first discovered in 2009, could be a game-changer for Sierra Leone. Currently three companies are conducting exploratory operations and the Ministry of Finance expects oil in commercial quantities to be verified in 2012. If so, this could lead to significant investment in the country, which would necessitate a reassessment of Sierra Leone's projected long-term growth trajectory.
In a recent report issued by the Standard Chartered Bank forecasts show Sierra Leone is set for rapid growth; with forecasts at 30% growth in real GDP in 2012 Government forecasts from the Ministry of Finance and the IMF go beyond this and estimate a potential one time surge in real GDP growth of 51% y/y in 2012 owing to new iron-ore production from the Tonkolili mine which would still put Sierra Leone among the fastest-growing African countries.
The Country continues to rebuild its reputation following the bitter civil war in the late 1990s. The war impacted severely on the mining sector but, since the cessation of rebel activity and re-establishment of government control in early 2002, the mining industry has been targeted by the Sierra Leonean government as a priority for re-development. A concerted effort has been made through capacity building and institutional reform to enhance the country's attractiveness to investors and increase foreign direct investment. Parliamentary elections took place in August/September 2007. The elections were declared to be open and fair by international observers and a peaceful transition of power has taken place to the main opposition party. The local government system is based on chiefdoms and patrilineal descent. A good working relationship at local level is essential for the smooth running of exploration and mining projects. GGSM has forged alliances at the very highest levels of Sierra Leonean society.
The Strategy and Policy Unit of the Ministry of Mineral Resources in Sierra Leone predict that annual production growth after 2012 will be 4% for diamond production and 10% for gold. Additionally they forecast that Mineral exports could rise to $1.2bn by 2020 from a base of $230m in 2007. Mineral exports per Capita are set increase to $170 in 2020 for $34 in 2007, an increase of 400%.
Strong global demand for minerals, underpinned by rapid growth in emerging economies such as China, Brazil and India, has fueled an investment boom in the mining sector. Of particular interest to Sierra Leone is the dominance of junior exploration companies in this revival, since they will be most likely to underpin the exploration investments needed to establish Sierra Leone's mineral potential, and the increasing appetite of major mining companies to make large investments in high-risk, emerging economies. Data issued by the Ministry of Trade and Industry in combination with Sierra Leone Import and Export Promotion Agency (SLIEPA) supports the growing investment stating that the potential pipeline across all sectors was over US $10 billion. Sierra Leone has now become a melting pot of oil, iron ore, diamonds and other investments.
The Government has taken positive action to help restore confidence and promote growth across the mining industry all boosted with the long standing return to political stability in Sierra Leone. With a new investment code introduced in 2005 focusing on the promotion of value added activities and joint ventures with foreign investors the Government is working to rejuvenate the domestic mining sector and to allow it to once again underpin the formal economy and support the Government's developmental objectives that include.
The successful implementation of an IMF-supported economic reform program has established a sound macroeconomic environment. Inflation has been kept under control, the exchange rate has stabilized, and access to foreign exchange has improved.