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National Diamond Mining Company of Sierra Leone

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

The National Diamond Mining Company of Sierra Leone was established in 1970 as the government took effective control of the Sierra Leone Selection Trust, the company that had held the protectorate-wide diamond monopoly. The government’s 51 percent stake made the new company the first phase of Siaka Stevens’s plan to take over diamond mining, placing a widely accessible resource under state control.

From alluvial discovery to monopoly

Diamonds were discovered in Kono, in eastern Sierra Leone, in January 1930. Because they were alluvial rather than buried in deep mines, they could be collected by panning in rivers, a method that allowed many people to participate. The British government nevertheless granted the Sierra Leone Selection Trust a monopoly over diamond mining throughout the protectorate and gave the concession to De Beers, the South African mining company.

In 1936, De Beers received authority to establish the Diamond Protection Force, a private army that grew larger than Sierra Leone’s colonial government forces. The scale and dispersed nature of alluvial mining made it difficult to police: by the 1950s, thousands of unlicensed miners had overwhelmed the force, turning the diamond fields into a major source of conflict and disorder.

The limits of colonial control

In 1955, the British government opened some fields to licensed diggers outside the Sierra Leone Selection Trust. The concession did not end the company’s dominance: it retained the richest areas, including Yengema, Koidu, and Tongo Fields. The arrangement thus combined limited access for other miners with continued corporate control over the most valuable deposits.

The history of the fields contrasted with the alternative adopted in Australia, where authorities permitted anyone who paid an annual license fee to search for and dig alluvial gold. In Sierra Leone, the monopoly system had instead concentrated control in a company and left a large number of miners outside its legal framework.

Nationalization and political control

After independence, Stevens effectively nationalized the Sierra Leone Selection Trust in 1970 and created the National Diamond Mining Company of Sierra Leone. The government held 51 percent of the new company, a stake the account identifies in practice with Stevens himself. Its formation was not presented as a completed transfer of the entire industry, but as the opening phase of his plan to take over diamond mining in the country.

The company’s creation therefore altered who exercised formal control without removing the political stakes surrounding the diamonds. The earlier monopoly had placed valuable deposits under a private concession; the new arrangement brought a majority share into government hands. In the book’s wider account, the diamond sector illustrates how institutions governing resource access could concentrate economic opportunity and power rather than distribute the benefits of a resource that many people could physically mine.