Koidu Limited Halts Operations, Thousands of Workers Laid Off Amid Dispute

Koidu Limited, Sierra Leone’s largest diamond miner, has shut down operations and laid off over 1,000 workers amid wage disputes and poor conditions. Workers cite outdated exchange rates reducing their pay to 30% of its true value, alongside inadequate working conditions. The conflict escalated from a strike in December 2024, with political tensions adding to the complexity as accusations surface against Sierra Leone’s First Lady. The shutdown threatens the global diamond supply chain.

Koidu Limited, Sierra Leone’s largest diamond mining company, has halted operations and laid off over 1,000 employees in the midst of a tumultuous wage and working conditions dispute. The local workforce claims their salaries represent only about 30% of what they should be, attributed to an outdated exchange rate from 2016. Additionally, many workers are raising alarms over inadequate working conditions, particularly the lack of clean drinking water and proper sanitation.

The conflict ignited with a strike in December 2024, but after temporary suspension for negotiations, workers resumed their protests in early March when discussions failed to make headway. Charles Kainessie, head of the Koidu Limited Workers’ Union, noted that only a handful of staff now remains at the company’s headquarters in Freetown. The Ministry of Labour has verified the mass termination affecting over 1,000 workers, heightening tensions in the community.

Central to the dispute is Koidu Limited’s salary structure, which has come under severe scrutiny. Kainessie explained that salaries, pegged to the U.S. dollar, have been disbursed in Sierra Leone’s leone without adjusting for the current exchange rate, effectively diminishing their value significantly. Further compounding these issues are complaints about the working environment, as workers have consistently expressed their dissatisfaction with living and working conditions.

The shutdown of Koidu Limited could pose a serious threat to the global diamond supply chain, particularly since this company is crucial, with exports reaching around $100 million per year. This event occurs amid broader production cuts by major diamond exporting countries like India, which already places strain on diamond supplies worldwide.

The matter has also taken a political twist. Koidu Limited has accused Sierra Leone’s First Lady, Fatima Bio, of heightening tensions following her public criticism of the company’s treatment of workers during her March visit to Kono District. She labeled it “unjust” in an online post, a statement that the company has dismissed as untrue. The firm has reported suffering significant financial losses of upwards of $16 million due to the strike, estimating it would require an influx of $20 million to restart operations.

As both sides navigate this complicated situation, the implications for Sierra Leone’s mining sector and local economy remain uncertain. The ongoing struggle signals deep-rooted issues in wage structures and community worker rights that will need addressing, lest similar disputes arise in the future.

Koidu Limited’s decision to cease operations and terminate over 1,000 workers underscores the serious distress regarding wages and working conditions in Sierra Leone’s diamond industry. With workers alleging they receive nominal wages and citing inadequate working environments, the situation presents significant ramifications for both local communities and the global diamond market. Political tensions could further complicate resolutions, as stakeholders grapple with the way forward in a landscape marked by labor unrest and economic challenges.

Original Source: africa.businessinsider.com