Koidu Limited, Sierra Leone’s top diamond miner, has shut down, leading to over 1,000 layoffs due to disputes over salaries tied to an outdated exchange rate and poor working conditions. The situation has escalated from a strike in December 2024 to resumed strikes in March, with political tensions emerging as well. Financial losses from the conflict are significant, raising concerns about the broader diamond supply chain.
Sierra Leone’s largest diamond miner, Koidu Limited, has halted its operations, resulting in the dismissal of over 1,000 local workers. This drastic move comes amid an ongoing wage and conditions dispute between the company and its workforce. Reports indicate that employees are earning only 30% of their actual wages due to an outdated exchange rate. Conditions on-site have also drawn criticism, with workers citing insufficient access to clean water and proper sanitation facilities.
The conflict traces back to a strike initiated in December 2024, which was temporarily paused for negotiations. However, when discussions failed, workers resumed their strike in early March, seeking better pay and working conditions. Charles Kainessie, the union president at Koidu Limited, noted that very few employees are left active at the company’s head office in Freetown.
The Ministry of Labour has confirmed that they received mass termination letters, impacting over 1,000 workers. Kainessie highlighted the significant issue with salary payments, as the company’s wage structure is tied to the U.S. dollar but paid in Sierra Leone’s currency at a rate that hasn’t been updated since 2016.
In terms of diamond supply, this shutdown poses a bigger risk to global markets that are already feeling the pressure from reduced production in key exporting countries, like India. Estimates suggest Koidu Limited’s operations contribute about $100 million annually to diamond exports, a notable figure in an industry facing strain.
Moreover, the dispute has taken a turn into political waters. Koidu Limited has publicly blamed Sierra Leone’s First Lady, Fatima Bio, for escalating tensions. During a visit to the Kono District where the mine is located, she took to social media to voice her criticism of the company’s treatment of its workers, labeling it “unjust.” In response, Koidu Limited dismissed her comments as false.
According to sources, the strike has already led to substantial losses, with Koidu reporting financial damages exceeding $16 million. To facilitate the potential resumption of operations, the company estimates it would need about $20 million.
The suspension of Koidu Limited’s operations has serious implications not just for the local workforce—over 1,000 workers laid off—but also for the global diamond supply chain already under pressure. Wage disputes, linked to an outdated exchange rate and poor working conditions, have fueled discontent among workers, leading to strikes and escalating tensions. Political involvement from figures like Sierra Leone’s First Lady adds another layer to this complex situation, further complicating recovery efforts in the diamond sector.
Original Source: africa.businessinsider.com
