LYING in Sierra Leone’s mineral-rich eastern belt, the diamond mines were once at the heart of the country’s decade-long civil war. Six hours from the capital, Freetown, burned-out houses are testament to the brutal conflict that coined the term ‘blood diamonds’ as warring factions fought to control lucrative diamond fields.

Now, the pit that served as a war chest for the rebels — infamous for recruiting child soldiers to hack limbs off their victims — supplies the jeweller Tiffany’s. It is also at the heart of a remarkable turnaround that has lifted this tiny nation of five million people to world-leading growth of 35 per cent this year.

“When the mine began operating in 2002, there were still 16,000 peacekeepers in the country. From an investment perspective, it was, basically, how much money are you prepared to lose,” said Koidu Holdings chief executive Jan Joubert, who persuaded investors to put down a relatively paltry $16m back then.

Joubert, who came to Sierra Leone in 1995 with the now defunct South African mercenary outfit Executive Outcomes, said the company plans to raise $1bn on top of a $300m expansion programme, and boost production to around 500kg of gemstones annually. A public listing could also feed demand for China’s luxury market.

The government hopes the burgeoning success of wildcat explorers will pave the way for big multinationals with deep pockets, allowing the country to haul itself into the bracket for middle-income countries such as South Africa or Mexico. “There is no doubt mining can transform Sierra Leone’s fortunes,” said Sierra Leone’s finance minister, Samura Kamara.

“Mining is bringing in a one-off increase [in GDP] this year but we have also made tremendous progress in improving the atmosphere for investment generally, and we are seeing that trickle down.”

Other companies are pouring money into the sector once associated with drug-crazed warlords. Aim-listed African Minerals claims the world’s biggest magnetite mining operation will earn the government $92bn in royalties over a decade or so. Meanwhile, London Mining, in which commodity giant Glencore has an ‘offtake’ or supply agreement, plans to more than treble its iron-ore yields within a decade. Signs of money flooding in on the back of the mining boom are evident. Where peacekeepers once stood guard on the outskirts of Freetown, tractors are clawing huge chunks of red earth to connect satellite towns to the capital. There, Chinese companies are widening the cramped colonial-era roads designed for horse-drawn carts.

The country’s white sand and rainforest-enclosed beaches remain largely empty amid a lack of tourism infrastructure, but the Hilton group plans to open an outlet here soon. And Sierra Leone has jumped 15 places to 141 on the World Bank’s 2012 Doing Business rankings, ahead of its neighbours. — The Guardian, London