Koidu Limited, the largest diamond mining company in Sierra Leone, has suspended operations and dismissed nearly all of its over 1,000 local workers amid an ongoing dispute over wages and working conditions. The shutdown is expected to further tighten global diamond supplies, which are already under strain due to production cuts from key exporters such as India.

The conflict began with a strike in December 2024, which workers temporarily suspended to allow room for negotiations. However, when talks failed to yield progress, workers resumed the strike in early March. According to Charles Kainessie, president of the Koidu Limited Workers' Union, only a few employees remain at the company's head office in Freetown. The Ministry of Labour confirmed it had received mass termination letters affecting more than 1,000 employees.

At the heart of the dispute is the company's salary structure. Kainessie said workers were receiving only 30% of the actual value of their wages because their salaries, pegged to the U.S. dollar, were being paid in Sierra Leone's currency using an outdated 2016 exchange rate. He also raised concerns about poor working conditions, citing a lack of access to clean drinking water and proper sanitation.

The dispute has also taken a political turn. Koidu Limited has accused Sierra Leone's First Lady, Fatima Bio, who is from the Kono District where the mine operates, of aggravating tensions. During a visit to the area in March, she publicly criticised the company, calling its treatment of workers "unjust" in a social media post. The company dismissed her remarks as false.

The company had reportedly suffered financial losses of more than $16 million due to the strike and estimated it would require $20 million to resume operations. Industry sources estimate Koidu Limited's exports at around $100 million annually. The shutdown is likely to have significant implications for Sierra Leone's economy, which is heavily reliant on diamond exports.

The shutdown of Koidu Limited's operations is the latest in a series of challenges facing the diamond industry. Global diamond supplies have been under strain in recent years, with key exporters such as India and Russia reducing production. The shutdown is likely to further exacerbate the supply shortage, leading to higher prices for diamonds.

The incident also highlights the need for better working conditions and fair wages in the mining industry. The use of outdated exchange rates and poor working conditions are unacceptable and must be addressed to prevent similar disputes in the future. The Sierra Leonean government must take steps to ensure that workers are protected and that companies operating in the country adhere to international labour standards.

In conclusion, the shutdown of Koidu Limited's operations is a significant development that will have far-reaching implications for the diamond industry and Sierra Leone's economy. The dispute highlights the need for better working conditions, fair wages, and responsible business practices. As the situation unfolds, it remains to be seen how the company and the government will address the concerns of workers and ensure a sustainable future for the industry.