Sierra Leone’s Diamond Mining Giant Koidu Limited Ceases Operations, Resulting in Over 1,000 Job Losses Amidst Labor Dispute

Koidu Limited, the preeminent diamond mining company operating in Sierra Leone and a significant contributor to the nation’s economy, has made the drastic decision to halt all mining operations. This shutdown has resulted in the layoff of virtually its entire local workforce, comprising more than 1,000 employees, marking a severe blow to the local economy and stemming from a protracted and deeply entrenched dispute over fair wages and acceptable working conditions.

The labor unrest at the Koidu mine, located in the diamond-rich Kono District of eastern Sierra Leone, has been brewing for several months. Workers initially embarked on a strike in December 2024, bringing mining activities to a standstill. However, in a gesture of goodwill and in the interest of finding a mutually agreeable solution, the workers’ union decided to temporarily suspend their industrial action to allow for formal negotiations with the company’s management. Unfortunately, these negotiations failed to yield a satisfactory resolution, leading to a renewed and more resolute walkout by the disgruntled workforce in early March 2025.

Koidu Limited operates as a subsidiary of Octea Limited, a diamond mining and exploration group. Octea Limited was initially founded by BSG Resources, a global natural resources company with significant interests in mining, which was at the time controlled by Israeli billionaire Beny Steinmetz. Steinmetz and BSG Resources have faced considerable scrutiny and legal challenges in the past related to their mining operations in various parts of the world, adding a layer of complexity to the current situation in Sierra Leone.

Charles Kainessie, the president of the Koidu Limited Workers’ Union, conveyed the gravity of the situation to Reuters, stating that only a minimal number of administrative staff were still employed at the company’s head office located in the capital city, Freetown. This starkly illustrates the scale of the operational shutdown and the widespread impact on the local workforce directly dependent on the mine for their livelihoods.

The Sierra Leonean Ministry of Labour has officially acknowledged the severity of the situation, confirming in a statement issued on May 6, 2025, that it has received copies of summary dismissal letters for more than 1,000 employees of Koidu Limited. This formal notification underscores the reality of the job losses and the potential socio-economic consequences for the affected workers and their families in a region where mining plays a crucial role in the local economy.

Kainessie further elaborated on the core grievances of the striking workers, highlighting the fundamental issues that fueled their prolonged industrial action. He explained to Reuters that the workers had been subjected to a significant devaluation of their earnings, receiving only 30% of the intended value of their salaries. This discrepancy arose because their wages were contractually pegged to the relatively stable United States dollar but were being paid out in the local Sierra Leonean currency, the Leone (SLL). Compounding this issue, the company was allegedly using a severely outdated exchange rate dating back to 2016, which did not reflect the current economic realities and the significant depreciation of the Leone against the US dollar over the intervening years. This practice effectively eroded the real purchasing power of the workers’ wages, leading to substantial financial hardship.

Beyond the critical issue of inadequate compensation, Kainessie also raised serious concerns regarding the substandard working conditions at the mine. He alleged that workers lacked access to basic and essential amenities, including adequate and sanitary toilet facilities and a reliable supply of clean drinking water. These allegations, if substantiated, point to a disregard for the fundamental health and safety needs of the workforce, further exacerbating the already tense labor relations at Koidu Limited.

Koidu Limited, when approached for comment on these serious allegations and the operational shutdown, declined to provide any substantive response. Ibrahim Turay, the company’s head of corporate affairs, stated that he was “restricted from making any comments on the issue for now,” indicating a potentially sensitive and legally charged situation. This silence from the company’s management has likely further fueled the frustration and uncertainty among the laid-off workers and the wider community.

The cessation of operations at Sierra Leone’s largest diamond mine could have notable repercussions on the global diamond markets, which are already facing supply constraints due to various factors affecting major diamond-producing regions, including India’s own challenges within its diamond industry. Industry sources estimate that Koidu Limited’s annual exports of rough diamonds are in the vicinity of $100 million, representing a significant volume of supply to the international market. A prolonged shutdown could therefore contribute to upward pressure on diamond prices and potentially impact the supply chain for diamond jewelry and industrial applications worldwide.

Adding a contentious and unusual dimension to this labor dispute is the accusation leveled by Koidu Limited against Sierra Leone’s First Lady, Fatima Bio, who hails from the very region where the Koidu mine is located. The company has publicly accused the First Lady of actively “fanning the flames” of the ongoing dispute and inciting further unrest among the workers.

These accusations stem from a visit made by Fatima Bio to the Koidu mining area following the renewed workers’ walkout in March 2025. During her address to the striking workers, she reportedly voiced strong criticism of Koidu Limited’s treatment of its employees, remarks that the company vehemently rejects as factually incorrect and inflammatory.

Following her visit and interaction with the workers, First Lady Fatima Bio further articulated her stance on the issue through a social media post, stating that Koidu Limited had been “unjust to the workers for far too long.” This public expression of support for the striking workers and criticism of the company’s practices has clearly incensed the management of Koidu Limited.

In a strongly worded letter dated May 6, 2025, addressed directly to Fatima Bio, Gustaf Fredrik Bodin, a director and the general counsel of Koidu Limited, responded to the First Lady’s statements. In this letter, which was reviewed by Reuters, Bodin accused Fatima Bio of unlawful interference in the company’s affairs, incitement of the workers, defamation of the company’s reputation, and causing significant damage to both Koidu Limited and its parent company, Octea Limited.

The letter from Koidu Limited reportedly demanded a public retraction from Fatima Bio regarding her statements and a written commitment that she would refrain from making any further threats or critical remarks against the company in the future. As of the latest reports, neither the First Lady nor her office has issued any public response to Koidu Limited’s accusations or the threat of potential legal action. This silence from the First Lady’s office leaves the situation in a state of heightened tension and uncertainty.

Amidst this escalating conflict between the mining company and the First Lady, the government of Sierra Leone has acknowledged the seriousness of the situation and the potential ramifications for the country’s economy and social stability. Sierra Leone’s Information Minister, Chernor Bah, assured Reuters that “everything is being done to resolve the impasse.” However, the specific measures being taken and the timeline for a potential resolution remain unclear.

The shutdown of Koidu Limited and the mass layoffs represent a significant challenge for Sierra Leone, a nation heavily reliant on its mineral resources, particularly diamonds, for foreign exchange earnings and employment. The Kono District, where the mine is located, is historically significant for its diamond production, and the livelihoods of a large segment of its population are directly or indirectly linked to the mining industry. The cessation of operations will undoubtedly have a cascading effect on local businesses and the overall economic well-being of the region.

The situation at Koidu Limited underscores the complex interplay between multinational mining companies, local workforces, government regulations, and community interests in resource-rich nations. Protracted labor disputes, fueled by grievances over wages and working conditions, can have severe consequences for all stakeholders involved, leading to production halts, economic losses, and social unrest. Finding equitable and sustainable solutions that address the legitimate concerns of workers while ensuring the viability of mining operations is crucial for fostering long-term economic development and social harmony in such regions. The unfolding situation in Sierra Leone will be closely monitored by the international mining community, labor organizations, and investors concerned with ethical labor practices and the stability of global supply chains.

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Photo source: Google

By: Montel Kamau

Serrari Financial Analyst

13th May, 2025