Koidu Holdings Saga :How it Came About ,Lessons Learnt and Actions Going Forwards

 

From War Profiteering to Corporate Mining: The Evolution of Koidu Limited

Sierra Leone's journey from civil war to economic rebuilding is closely linked to its diamond-rich lands. Central to this narrative is Koidu Limited, a company whose transformation from a wartime enterprise to a significant player in the global diamond industry reflects the nation's struggles and aspirations. This synopsis explores Koidu Limited's history, examining its origins, challenges, and broader implications for Sierra Leone's socio-economic landscape.

Origins Amidst Conflict

The illicit diamond trade significantly influenced the civil war that affected Sierra Leone from 1991 to 2002. Rebel groups, notably the Revolutionary United Front (RUF), financed their insurgency through the control and sale of diamonds, leading to the term "blood diamonds" entering the global lexicon. To reclaim control, the Sierra Leonean government enlisted Executive Outcomes (EO), a South African private military company, in 1995. As compensation, EO's sister company, Branch Energy, was granted diamond mining rights in the Koidu region. This arrangement temporarily stabilised the area but raised ethical concerns about commodifying natural resources in exchange for military intervention.

Transition to Corporate Mining

Post-war reconstruction efforts led to the establishment of Koidu Holdings in 2003, inheriting the mining lease from Branch Energy. That year marked the beginning of formalised, corporate-led diamond mining in Sierra Leone. Koidu Holdings, later known as Koidu Limited, focused on developing the Koidu Kimberlite Project, targeting primary kimberlite pipes and dyke zones within the Tankoro Chiefdom. The company became a subsidiary of Octea Limited, owned by BSG Resources (BSGR) and linked to Israeli businessman Beny Steinmetz. In 2010, a revised mining lease extended Koidu Limited's operations until 2030, with an optional 15-year extension.

Community Unrest and Legal Challenges

Despite economic development promises, Koidu Limited's operations have faced community unrest and legal disputes. In 2007, protests erupted over displacement and environmental concerns, leading to a tragic incident where police opened fire on demonstrators, resulting in fatalities. This event highlighted the tensions between mining companies and local communities. In 2015, the Koidu City Council sued Octea for unpaid property taxes. The court's verdict separated Octea from Koidu Limited, effectively shielding the parent company from tax obligations and sparking debates on corporate accountability.

Environmental and Social Impacts

Koidu Limited's mining activities have had significant environmental and social repercussions in the Kono District. Large-scale blasting operations forced numerous families to relocate, often without adequate consultation or compensation. Environmental degradation, including air and noise pollution, has been reported, with residents attributing health issues to the mining operations. Water sources have also been contaminated, affecting both human health and agriculture. While Koidu Limited initiated some Corporate Social Responsibility (CSR) projects, these efforts are insufficient to address the broader disruptions caused by mining activities.

Economic Contributions and Challenges

Koidu Limited has been one of Sierra Leone’s largest private employers and a significant contributor to the country's mining sector. However, opaque financial operations and tax practices complicate assessing its actual economic contribution. While the company has provided employment and contributed to government revenue through royalties and licensing fees, the benefits to local communities remain minimal. The volatility in the global diamond market, inadequate infrastructure, and internal challenges like labour disputes have further complicated the company's operations.

Recent Developments and Shutdown

In 2025, Koidu Limited faced a significant crisis, leading to an indefinite shutdown of its operations. The immediate cause was a massive labour strike, prompted by grievances about stagnant wages, poor working conditions, and a lack of job security. Negotiations between the workers' union and company management broke down, suspending all operations. The shutdown has had ripple effects across the local economy in the Kono District, with many small businesses suffering significant losses. The government attempted to mediate the conflict, but efforts were hampered by mutual distrust and the absence of a formal grievance mechanism. There have been rumours about the possible sale of Koidu Limited to another international investor or restructuring under new management that is more attuned to local demands.

International Regulations and Ethical Considerations

International frameworks have influenced the operational environment for Koidu Limited and other mining companies in Sierra Leone. The Kimberley Process Certification Scheme (KPCS), established to prevent the flow of conflict diamonds, requires Sierra Leone to certify that all diamond exports are conflict-free. While the KPCS has reduced trade in "blood diamonds," its scope remains limited as it does not address broader issues, such as labour rights or environmental degradation. Other international guidelines, including the OECD's Due Diligence Guidance and the United Nations Guiding Principles on Business and Human Rights, offer more comprehensive frameworks that emphasise ethical sourcing and corporate accountability. Although implementation has been inconsistent, Sierra Leone’s participation in the Extractive Industries Transparency Initiative (EITI) represents another step towards greater transparency.

Future Prospects and Potential Reforms

Koidu Limited finds itself in a pivotal position. The recent shutdown, community unrest, and global scrutiny have created an environment ripe for reform. The company's survival—and its potential to contribute positively to the country’s development—depends on adopting a more sustainable, inclusive, and transparent mining model. This process includes restructuring ownership and management, overhauling the mining sector's legislative framework, enforcing mandatory Community Development Agreements (CDAs), implementing environmental reforms, and aligning with international ESG standards. By doing so, Koidu Limited can reposition itself in premium markets that demand responsible supply chains and rebuild trust with local communities.

Koidu Limited’s evolution from a war-profiteering arrangement to a symbol of corporate mining in Sierra Leone is both emblematic and instructive, telling a story of missed opportunities, enduring challenges, and the potential for transformation. The company’s complex history—marked by legal battles, community protests, and ethical controversies—serves as a microcosm of the larger struggle to harness Africa’s natural wealth for its people. With reforms, strategic restructuring, and genuine community engagement, Koidu Limited can become a responsible corporate entity. The broader mining sector can be reimagined—not merely as an engine for exports but as a foundation for inclusive and sustainable development. The road ahead is challenging, but if all stakeholders—government, corporations, and communities—can come together to redefine the social contract, Sierra Leone can transform its diamonds from symbols of conflict into instruments of prosperity.

RECOMMENDATIONS ON ACTIONS TO TAKE ON MINING LEARNING FROM KOIDU HOLDINGS

 

Enhanced Transparency and Sovereignty Framework for Mining and Agricultural Industrialisation

 

1. Mandatory Disclosure of Mining and Agricultural Land Contracts

• Best Practice: Extractive Industries Transparency Initiative (EITI), Open Contracting Standards, UNGA Resolution 1803 (XVII) on Permanent Sovereignty over Natural Resources (PSNR).
• Action:
• Disclose all contracts, annexes, and terms online and in local languages.
• Provide physical copies to chiefs and landowners.
• Train traditional leaders to interpret contract terms.
• Impact: Promotes local sovereignty, protects community rights, and prevents exploitative agreements.

 

2. Establish a Beneficial Ownership Register

• Best Practice: Financial Action Task Force (FATF), EITI guidelines.
• Action:
• Mandate full disclosure of beneficial owners for all extractive and agro-industrial projects.
• Include foreign investors, intermediaries, and joint ventures with local landowners.
• Impact: Prevents corruption, clarifies ownership, and ensures community awareness of resource beneficiaries.

 

3. Implement Real-Time Revenue and Royalty Reporting

• Best Practice: Natural Resource Governance Institute (NRGI), EITI.
• Action:
• Develop a live digital portal showing payments—royalties, leases, and dividends.
• Disaggregate data by company, commodity, and chiefdom.
• Set a minimum royalty benchmark of 20%.
• Impact: Strengthens fiscal transparency and improves negotiation power for the state and local landowners.

 

4. Strengthen and Legalise Community Development Agreements (CDAs)

• Best Practice: UN Declaration on the Rights of Indigenous Peoples (UNDRIP), Free, Prior and Informed Consent (FPIC).
• Action:
• Require co-signing by chiefs, landowners, and company reps.
• Include enforceable timelines, budgets, and audits.
• Impact: Aligns development with community needs and ensures enforceable benefit sharing.

 

5. Mandate Environmental and Social Impact Assessments (ESIAs) with Customary Participation

• Best Practice: OECD Due Diligence Guidance, UN Guiding Principles on Business and Human Rights.
• Action:
• Conduct village-level public hearings in local languages.
• Integrate traditional ecological knowledge into assessments.
• Impact: Protects cultural heritage and ecological sustainability and ensures informed consent.

 

6. Expand the Role and Reach of the Sierra Leone EITI Secretariat

• Best Practice: EITI 2023 Standard.
• Action:
• Create a Traditional Stakeholders Committee of chiefs and landowners.
• Fund community engagement and data literacy programmes.
• Impact: Deepens local ownership of governance and strengthens accountability.

 

7. Enforce Penalties and Legal Recourse for Non-Compliance

• Best Practice: Transparency International anti-corruption frameworks.
• Action:
• Introduce legal penalties—fines, licence suspensions, or revocations.
• Empower chiefs to initiate proceedings against violators.
• Impact: Reinforces the rule of law and deters corporate misconduct.

 

8. Digitise and Localise Resource Governance Systems

• Best Practice: Open Government Data principles, Public Financial Management (PFM).
• Action:
• Develop an integrated public platform that covers:
• Mining/agricultural leases
• Royalties and taxes
• Environmental audits
• CDA compliance status
• Provide mobile-compatible access for chiefs and printed summaries for remote areas.
• Impact: Enhances transparency and enables citizen and traditional oversight.

 

9. Leverage Equity Participation via Local Content and Stock Listings

• Best Practice: African Mining Vision, UN Sustainable Development Goals (SDGs).
• Action:
• Allocate at least 25% of the project's value to local content (labour, procurement, and services).
• Require a 25% equity listing on national stock exchanges for public participation.
• Impact: Transforms communities into shareholders, enabling intergenerational wealth sharing.

 

10. Apply Permanent Sovereignty to Agricultural Industrialisation

• Best Practice: UNGA Resolution 1803, FAO Voluntary Guidelines on the Responsible Governance of Tenure (VGGT).
• Action:
• Subject:       Large-scale land deals to:
• Community referendums
• Transparent royalty structures
• Sustainability certifications
• Empower chiefs and landowners as co-managers of land deals.
• Impact: Extends sovereignty to land-based agriculture, ensuring food security and environmental stewardship.

 11. Enforce Industrial and Labour Regulations in Resource Projects

• Best Practice: Based on International Labour Organisation (ILO) Conventions, UN Global Compact Labour Principles, and the African Charter on Human and Peoples’ Rights.

• Action:

  • Enact and enforce laws that guarantee:

    • Fair wages and regular employment contracts

    • Occupational health and safety (OHS) standards

    • Freedom of association and the right to collective bargaining

    • Non-discrimination and gender equality in hiring and promotions

    • Prohibition of child and forced labour

  • Mandate third-party labour audits for companies exceeding a certain workforce threshold.

  • Grievance redress mechanisms are required at all mining and agri-industrial sites.

• Role of Chiefs and Communities:

  • Chiefs and local councils must participate in workplace inspections and labour forums.

  • Community labour representatives should sit on local employment monitoring boards.

• Impact:

• Resource development elevates human capital, not just economic metrics.

• It prevents station and industrial conflict.

• The policy aligns national labour practices with ILO Core Labour Standards and SDG Goal 8 on "decent work for all".

• • This eleventh pillar complements the proposed sovereignty, transparency, equity, and environmental safeguards.

  • It guarantees the human workforce's protection, empowerment, and respect, laying the groundwork for a sustainable and inclusive extractive and agricultural economy.

  • These recommendations offer a holistic policy blueprint grounded in international law, customary governance, and social justice principles.

  Summary

• Embeds Permanent Sovereignty over Natural Resources (UNGA Res. 1803).
• Mandates a minimum 20% royalty on extractive/agricultural resource use.
• The project requires a 25% local content investment and 25% equity via public stock offerings.
• Frontline custodians in resource governance include centres, chiefs, and landowners.
• Anchored in international best practices and legal standards to promote:
• Sustainable development
• Local accountability
• Equitable wealth distribution

This framework lays the foundation for sovereign, inclusive, and community-driven resource management in Sierra Leone, one in which future generations inherit both the rights and rewards of their land.

 

 References

·       Africa Confidential. (2025). Strike at Koidu forces diamond mine shutdown.
BBC Africa. (2025). Labour unrest halts operations at Sierra Leone's largest diamond mine.

·       Environmental Justice Atlas. (2020). Koidu Diamond Mine, Sierra Leone.

·       EITI. (2023). Sierra Leone EITI 2022 Annual Progress Report.
Global Witness. (2014). Africa’s Missing Billions: Lost Revenue in the Extractive Sector.

·       Global Witness. (2016). The Great Rip-Off in Africa.

·       Human Rights Watch. (2008). Killings and Protests in Kono.

·       Human Rights Watch. (2012). Sierra Leone: Mining boom Threatens rights.

·       Kimberley Process. (2023). Annual Review Report

·       National Advocacy Coalition on Extractives. (2018). Report on Extractive Sector Reforms.

·       Reuters. (2015). Sierra Leone court Rules Octea not liable for mining tax.

·       Tax Justice Network. (2021). The State of Tax Justice.

·       The Economist Intelligence Unit. (2025). Koidu's Future is in the Balance.

·       The Guardian. (2014). Beny Steinmetz faces Corruption probe.

·       The Guardian. (2021). Mining Mogul Linked to Africa's Corruption Scandals.

·       World Bank. (2019). Botswana’s Success with Diamond-Led Development.

 

 About the Author

Mohamed Boye Jallo Jamboria is a Sierra Leonean geographer and development strategies consultant based in Norway. He served as a councillor for Lindås (now Alver) municipality from 2011 to 2018, contributing to local governance and community development. He is the founder and manager of ScanAfrik Forbundet (Org. No. 929 058 046), a registered non-profit association in Norway dedicated to empowering African communities locally and internationally. Based in Alversund, the organisation focusses on book writing to preserve African culture and heritage and community development initiatives in Sierra Leone, emphasising education, capacity building, and sustainable growth.  These efforts foster cultural exchange and drive lasting socio-economic impact. 

Jamboria is also the author and host of the Redemption Broadcast Network, which promotes unity among the Sierra Leonean diaspora. His scholarly contributions include a chapter in The Diverse Facets of Corruption in Sierra Leone (Springer Nature) and Building a Nation (Amazon).

He is tentatively working on a book project titled The Audacity of Change, The Koya Kingdom, and the Mano River Union. This project explores the Social Anthropology of the Mano River Union, focusing on Sierra Leone’s epigenetics and DNA commonalities across different linguistic groups and aims to map the bloodlines and commonalities of the people of the Mano River Union and Sierra Leone.