Ebola and the Mines of Guinea, Liberia and Sierra Leone, 2014

The question

On March 23, 2014, the World Health Organization announced what became the largest Ebola virus disease outbreak since the disease was discovered in 1976. It struck hardest in Guinea, Liberia and Sierra Leone — three countries whose hopes for economic growth in 2014 and 2015 rested on developing their mineral sectors, especially iron ore.

This USGS fact sheet looked at how important mining is to each country, where the mines and outbreak overlapped, and what the outbreak meant for investment in new mines, plants and infrastructure.

Background: mining after civil war

All three countries share histories of coups and civil war that wrecked the roads, bridges, ports and railways mining depends on. Rebuilding has progressed since 2011, but much is still in disrepair, and poor infrastructure and unreliable power still deter foreign investment.

• Guinea was among the world's leading bauxite producers in 2012 — about 6% of world output — and a significant producer of rough diamond.
• Liberia produces cement, rough diamond, some gold and iron ore. Its iron ore industry stopped in 1990 when civil war began. Diamonds helped finance the war, and the UN Security Council imposed diamond export sanctions in 2001, lifted in April 2007; iron ore mining resumed in 2011.
• Sierra Leone produces cement, rough diamond, some gold, iron ore and mineral sands (ilmenite and rutile). War halted bauxite and mineral sands in 1994, and diamond sanctions followed. After the war ended in 2002 and sanctions lifted in 2003, bauxite and rutile resumed in 2006, and iron ore in 2011 with the Marampa and Tonkolili mines. Its 94,493 metric tons of rutile were more than 11% of world output in 2012.

Mineral production, 2012

How much of the economy is mining

• Guinea: 14–15% of GDP from 2004 to 2011; an estimated 12.5% in 2013, partly because a strike temporarily closed its alumina plant.
• Liberia: about 25% before 1990, driven by diamonds and iron ore; rising again after 2007, to about 8% in 2012.
• Sierra Leone: about 15% before the war; about 12% in 2012.
• Estimates for 2013: about 13% (Guinea), 11% (Liberia) and 23% (Sierra Leone).

Mineral sector share of GDP, 2004–2013 (2013 estimated). USGS, from national banks and statistics offices and the International Monetary Fund.

The outbreak

• Guinea's health ministry reported the first laboratory-confirmed case on March 21, 2014.
• By early June, wide transmission was confirmed in Liberia and Sierra Leone.
• Cases peaked in late October and early November, and by year's end more than 20,000 people had been affected.
• By January 18, 2015, infection had slowed sharply, but transmission continued in all three countries, with 21,797 cumulative cases.

Cumulative reported Ebola cases, March 23, 2014, to January 18, 2015, from CDC figures based on WHO situation reports. USGS.

Markets turned at the same time

The outbreak coincided with market changes that threatened government mining revenue — just as iron ore was expected to become a major export for all three countries, and with bauxite already most of Guinea's export earnings:

1. Aluminum and bauxite prices had fallen after the 2009 recession.
2. Indonesia, a leading bauxite exporter, banned exports of unprocessed minerals.
3. Iron ore fell from $130 per metric ton in early 2014 to $68 by year's end.

Did the mines keep running?

Mostly, yes. Most companies reported little interruption in 2014, and several mines placed on care and maintenance were idled for reasons other than Ebola.

Sierra Minerals also expected lower output from bad weather and social tensions, not only the outbreak.

What was at stake: projects in development

The World Bank's forecasts of GDP growth through 2017 rested on new mineral projects. In 2012 it estimated that these projects could double Guinea's real GDP by 2015.

Liberia and Sierra Leone had begun to recover, with iron ore mining resuming in 2010 and 2011, many companies exploring, and advanced bauxite, diamond, gold and especially iron ore projects in the pipeline. The committed sums dwarfed the economies:

Associated infrastructure made up a large part of these costs.

Conclusions

• Industrial-scale mining largely continued through 2014, and most development and exploration work went on too.
• Mining companies acted quickly to help contain the virus: they secured the perimeters of their operations, trained staff in safety at the mines and in nearby communities, and set up health screening and prevention protocols. A group of them formed an advocacy group and, encouraged by the United Nations, pledged to keep operating, honor financial commitments, and keep paying and training staff. Many donated money and medical supplies.
• Mineral exports mostly kept moving, though sea freight was delayed at some ports, and cancelled flights hampered business travel.
• Still uncertain: whether the Marampa and Tonkolili mines would reopen and whether iron ore projects would reach production. Growth in all three countries depended on these projects; cancelling or badly delaying them would be a major setback.

Sources

Based on Omayra Bermúdez-Lugo and W. David Menzie, "The Ebola virus disease outbreak and the mineral sectors of Guinea, Liberia, and Sierra Leone," U.S. Geological Survey Fact Sheet 2015–3033 (2015); a work of the United States government in the public domain. The charts and the tables' figures are taken from the fact sheet's PDF; its two maps of mines and Ebola cases, drawn on boundaries derived from Esri data, are not reproduced.