December 21, 2012 / 10:00 PM / 6 years ago

Violent strike halts work at Sierra Leone Koidu diamond mine

FREETOWN, Dec 21 (Reuters) - Work at Sierra Leone’s Koidu diamond mine, operated by Israeli billionaire Beny Steinmetz’s Octea group, has been suspended indefinitely following a violent strike that resulted in at least two deaths, a company spokesman said on Friday.

Koidu, owned by Steinmetz’s BSG Resources through Octea, which is looking at a possible listing, sells diamonds worldwide to jewellers such as Tiffany & Co.

“Work at the Koidu mine has not resumed yet, and a back-to-work-date has not been set yet,” the spokesman said, requesting not to be named.

The violence erupted after miners began what the company said was an illegal strike on Dec. 18, demanding bonus payments based on two performance targets offered by the company.

The company said in a statement later on Friday that the workers met their first objective in May, which included the recovery of 35,000 carats of diamond, and a bonus was paid.

“The second target was the consistent achievement of 40,000 carats per month from June to December 2012, which would trigger a second bonus payment,” but the workers failed, it said.

The firm said it was working with the Sierra Leone government to resolve the issue, which could tarnish the west African nation’s image as an emerging investment destination.

Sierra Leone’s government is trying to shed the image of the bloody civil war years that were partially funded by so-called blood diamonds.

Despite investments in Sierra Leone’s growing mining sector which includes iron ore and agriculture sector, poverty and unemployment remain rampant and discontent over labour issues boils over frequently.

A similar incident occurred in the mine in 2007 during which two people were killed after police opened fire at protesters.

Another labour-related violence occurred in April in the Bumbuna district where mine workers protested at African Mineral’s iron ore mine. A woman was killed and at least six others were injured as the result of clashes between police and protesters.

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