By Hassan Osman Kargbo
In a recent press briefing, Minister of Mines, Matthew Mattai, provided an in-depth analysis of the revenue structure associated with Sierra Leone’s lucrative mining sector. His report highlighted the significant contribution of both tax and non-tax revenues to the national economy, along with the value of mineral exports during 2023 and projections for 2024.
Minister Mattai detailed how tax revenues, encompassing corporate income tax, withholding tax, Goods and Services Tax (GST), and customs/excise duties, are managed by the Ministry of Finance and the National Revenue Authority (NRA). Non-tax revenues, which include vital income from royalties and licensing fees associated with mineral extraction, fall under the purview of the Ministry of Mines.
For the fiscal year 2024, Minister Mattai projected non-tax revenues from the mining sector to reach approximately $50 million. Meanwhile, tax revenues generated from the sector are expected to be in the range of $8 to $9 million. These figures, though modest compared to the export value, underline the government’s continued reliance on the mining industry as a critical source of revenue.
A key highlight of the report was the total mineral export value, which reached $1.6 billion in 2023. However, a notable decline to $1.2 billion is expected in 2024, primarily attributed to the temporary cessation of operations by Sierra Rutile, one of the country’s significant mineral producers.
Minister Mattai provided a breakdown of export contributions for 2024 that underscores the dominance of the iron ore sector. Iron ore is anticipated to account for a staggering 70 percent of total exports, valued at approximately $785 million. This wealth is predominantly generated from leading companies, Kingho Mining Company and Marampa Mines, which have established themselves as key players in the iron ore market.
Diamonds, historically one of Sierra Leone’s most iconic exports, are projected to contribute 12 percet of total export value in 2024, translating to around $102 million. This revenue is primarily from Koidu Holdings, which accounts for $82 million, along with $20 million generated by artisanal miners. The diamond sector remains critical for local economies and continues to reflect the country’s rich natural heritage.
Gold mining, while a smaller player in terms of export value, still contributes significantly to the sector, with anticipated earnings of $11 million in 2024. Of this figure, artisan miners will account for approximately $10 million, while large-scale mining operations contribute about $1 million.
In a noteworthy development, the recent licensing of FG Gold— a large-scale gold mining company—promises to revolutionize the sector. This enterprise is projected to generate over $300 million annually, marking a significant leap from the current $1 million associated with large-scale gold exports. If realized, FG Gold’s operations could represent a paradigm shift in the country’s gold mining potential.
Minister Mattai emphasized the distinction between high export values and the actual revenue received by the government. He clarified that while export figures reflect substantial private investment, they do not directly equate to government income. Instead, the government benefits from taxes and royalties stemming from these exports.
The minister’s report reinforces the mining sector’s vital role in Sierra Leone’s economic landscape. While advancements are being made, the challenge remains to enhance the revenue framework to maximize benefits for the nation.
As the government works alongside mining companies, the goal is to ensure continued growth, transparency, and community benefit from the rich mineral resources that Sierra Leone has to offer.
