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development partners

Detailed information about Sierra Leone’s Development Partners



Your definitive guides to business advice in Sierra Leone





Mining Sector Overview


Sierra Leone’s primary mineral resources are diamonds, Rutile, bauxite, gold and iron ore. Mining, particularly of diamonds, gold, Rutile and bauxite, has a proven track record of viability in Sierra Leone. General geology suggests that reserves exceed what is known and being explored. Other known mineral deposits include iron ore, platinum, chromites, lignite and base metals (copper, nickel, molybdenum, lead and zinc). Between 2000 and 2003, the mining sector averaged growth of 5.8 percent per annum. With the introduction of the Kimberley certification Process, official mineral exports increased from US $10 million in 2000 to about US $140 million in 2007 thereby returning, at least in nominal terms, to the previous peak level achieved in 1991.

Leading Growth Driver

The mining sector is set to undergo a rapid expansion in light of production increases from expansions of existing and the opening of new operations. Real GDP growth for 2012 was initially projected to increase by over 50 percent on account of growth in the mining sector; this estimate was subsequently reviewed to about 35.9 percent due to delays in commencement of exports, particularly in the iron ore sector.

Sector Composition

The mineral sector in Sierra Leone is made up of three sub-sectors; the large-scale production of non-precious minerals such as Rutile, Bauxite and more recently iron ore; large scale production of precious minerals, particularly diamonds; and artisanal and small-scale production of precious minerals, mainly diamonds, and to a much lesser extent, gold. The industry comprises a combination of a few large operations, more numerous small to medium-sized companies and a very large number of artisanal mines. As of April 2012, two hundred and thirty four (234) companies had been granted licenses in various categories of trading, exploration and mining.

Unique Selling Points

  1. Proven Mineral Deposits

  • The prospects for the continued expansion of the mining sector are favourable, as:

  • There are proven and sufficient reserves of existing precious and non-precious minerals to allow increased investments and production for the foreseeable future.

More mining areas are becoming available, as:

  • The initial rush for exploration which started in 2002 continues to expire; and with the relinquishments are freeing up areas for new investments.

  • Between October 2008 and 2011, the available areas for mining activities increased from about 33,000 Km2 to over 50,000 Km2 due to relinquishments.

  1. Transparent and Modern Regulatory Regime

  • The sector has undergone major legal, regulatory and policy reforms.

  • The Mines and Minerals Act of 2009 presents a relatively transparent framework in:

  • The issuance of mining related licenses,

  • The fiscal regime; and

  • A universally applied tax code, among other regulations

  • The establishment of a Mining Cadastre Office (MCO), which in turn created an Online Repository which provides data on the licensing and mineral concession management

  1. Cheap Labour

  • The sector is among the leading formal employers in the economy; and is benefitting from competitive wages, compared to other economies

Licensing: Areas and Periods






Typically issued to provide potential investors an opportunity to identify specific areas for more intensive exploration. Normally non-exclusive and valid for 1yr with maximum renewal period of 1 year. It is issued to cover a maximum area of 10,000km2

Full Exploration

This license grants exclusivity over license are. It is valid for 4 years with and initial renewal option of 3 years and further renewal of another 2 years, bringing total maximum exploration period of 9 years. Licensed are issued for a maximum area 250km2 and licensees are encouraged to relinquish down to 125km2


Small Scale

Licenses are issued for land areas of up to 100 Hectare and for an initial period of 3 years, with a renewal option for another 3 years.

Large Scale

Licenses are issued for land areas of up to 250km2 and for an initial period of 25 years, with a renewal option for another 15 years, subject to terms and conditions and the general fiscal conditions as specified in the Mines and Mineral Act.

Source: Ministry of Mines and Mineral Resources

Licensing: Process and Requirements

The license application process has been simplified, and requirements clarified. The evaluation process is very transparent and results of an application evaluation are communicated to the applicant within very short periods of time.

Type of License

Key Requirements

Exploration License

  • Applications made through MCO

  • Company must be a registered limited company

  • Technical work programme should be included

  • Expenditure commitment details

  • Demonstration of financial & technical capacity

Mining License

  • Feasibility study, based on prove exploration

  • Detailed mine operational plan

  • Environmental Impact Assessment & management plan

  • Financial surety for environmental obligations

  • Community Development Agreement

  • Surface Rent Agreement

The Fiscal Regime

Category of Minerals

Relevant Rate (%)


Precious Stones


  • Valuation based on the market price at time of sale

  • Clear regulations on market based valuation of minerals

Precious Metals


Other Minerals


Source: Ministry of Mines and Mineral Resources

The Tax Code

The tax code is designed and implemented to ensure level playing field for small and large players in the sector. The following is a summary of applicable taxes and treatment allowances of certain items for tax purposes

Item Description

Applicable Treatment

Corporate Tax Rate

35% tax rate on corporate profits

Cost Amortisation

(Exploration and Development)

4 year profiled depreciation at 40%, 20%, 20%, 20% respectively, starting in the year the cost was incurred

Thin Capitalisation

Where the debt equity ratio exceeds 3:1, interest on loans granted by affiliated parties shall not apply

Limits on HQ Expenses

1.5% of sales

Special Tax Incentives

Losses can be carried forward from one year to the next up to 10yrs from the commencement of commercial production

Source: Ministry of Mines and Mineral Resources

Oil and Gas Sector Overview

Sierra Leone has historically gone through 3 phases of oil exploration; the first two stages involved drilling by Mobil in 1982 and by Amoco in 1985, to depths of approximately 3000 meters These exploratory wells, located close to the border with Liberia, are on the continental shelf, considerably shoreward of the deep-water basin complex. Oil shows were encountered in both exploration drillings, but these wells were plugged and abandoned.

Sierra Leone Offshore Play Concept

Source: National Petroleum Directorate

Oil and gas exploration activities started again in 2003 in Sierra Leone, when TGS NOPEC was engaged by the Government of Sierra Leone to carry out. TGS-NOPEC Geophysical Company acquired approximately 5,800 sq km of 2-D seismic data in 2000 and 2001 and 3,200 sq.km of 3D data in subsequent years. The data set consists of a total of 170 lines extending from the continental shelf to water depths of 2500 m to 4000 m, recording high quality, 10-second migrated seismic data. The southwest-northeast dip lines have an average spacing of 7 km and lengths of 50 km to 140 km. Five composite, northwest-southeast strike lines are each approximately 850 km long. Approximately 5,800 line-km of the seismic data were acquired in the offshore area of Sierra Leone.

Source: National Petroleum Directorate

Oil Block Awards and Exploration Activities updates on progress in exploration:

The first round of oil block awards was in 2003/2004, when 6 Petroleum Blocks. A number of companies carried out additional exploratory activities. The consortium comprising Anardarko, Repsol and Tullow Oil acquired 3D seismic data and progressed to drill 2 wells up to 18,000ft in 9,500ft of water between 2005 and 2010. One of the wells, the Venus B-1 provided 45 net feet of hydrocarbon pay, therein proving a working petroleum system. The group also encountered 135 net feet of hydrocarbon pay in the Mercury well, which is currently being appraised. Three more groups, Lukoil, Talisman and African Petroleum have acquired 3D seismic data, which are being interpreted and evaluated. Until 2012, the main actors in the petroleum sector were: (i) Anardaro/Repsol/Tullow Oil; (ii) Talisman/Prontina; (iii) Lukoil/Oranto; (iv) Young Energy Prize; and (v) African Petroleum

Source: National Petroleum Directorate

In August 2012 a new round of Oil Block Tender was completed, which saw the award of 9 more Petroleum Blocks to a range of companies. This process involved a total of 59 applications, and the results of the process are summarised as follows:

Block No.

No. of Applications

Groups Awarded

SL 4A-10


African Petroleum; KOSMOS Energy

SL 7A-10


Elinilto Ltd; Signet Petroelum; Miexco

SL 7C-10


Maters Energy

SL 8A-10


Chevron Sahara; Noble Energy; ODYE

SL 8B-10


Chevron Sahara; Noble Energy; ODYE



GNBH Exploration

SL 9B-10


GNBH Exploration

SL 10B-10


Varada Petroleum and Hydrocarbons

SL 10A-10



General Fiscal Regime of the Petroleum Industry

The Fiscal Regime of the oil and gas sector comprises three key instruments; (i) Royalty; (ii) Income Tax; and (iii) Petroleum Resource Rent Tax (PRRT). These, together with other complementing provisions, form the overall fiscal regime for Sierra Leone’s hydrocarbon industry. The following are specific rules that apply:

Type of Agreement

Hybrid Royalty-Tax Agreement

Corporate Income Tax


Exploration Period

Seven (7) years consisting an initial exploration period of 3 years with two (2) extension periods contingent on fulfillment of Work and Financial Obligations of each of the two (2) renewal periods

Work Programme

Negotiable, based on minimum expenditure


Licensee cannot retain more than 50% of licensed area after the initial exploration period and no more than 25% after the first extension period

Royalties (Oil)

Water depths up to 200 metres


Water depths over 200 metres


Royalties (Gas)

Water depths up to 200 metres


Water depths over 200 metres


Surface Rental

Initial Exploration Period

US $40 per sq. Km. per Annum

1st Extension Period

US $60 per sq. km. per annum

2nd Extension Period

US $85 per sq. km. per annum

Development and Production

US $110 per sq. km. per annum

The Petroleum Act 2011

Downstream Investment Opportunities

The country now has proven oil and gas deposits and production activities are imminent. In addition to exploration, development and production of crude oil, Sierra Leone also offers opportunities for downstream investments in the sector. With GDP growth rates averaging between 6% and 7% in recent years, this growth is fueled by economic activities that depend on petroleum products. Diesel and petrol are the country’s largest imports; and imports of these products have grown at approximately 20% annually over last 5 years. The regional West African demand should be able to support a refinery with capacity >200,000 barrels per day with additional export opportunities to supply US & European markets.

Oil and Gas Port Infrastructure

The presence of vast undeveloped lands close to sheltered deep-waters and natural harbour along the coast, create opportunities for oil and gas port infrastructure and services for imminent production activities

Oil Refinery

The Government is seeking strategic private sector partnership for rehabilitation and expansion of the Sierra Leone Petroleum Refining Company (SLPRC) assets. The company, originally created in 1970 as a JV between the GoSL and major international oil companies, was forced to close down ten years ago. The investments should improve on the operating infrastructure, to include a jetty installation and the adoption of modern machinery and equipment. The Sierra Leone Government prefers a strategic partner with extensive experience in operations and management.

Marketing and Distribution

The expansion in the production capacity of crude and refined oil creates even wider opportunities for marketing and distribution of the products both locally and in international markets.