Sierra Leone "Peace Diamond" sells for US$6.5m at auction

[NEW YORK] Sierra Leone sold one of the world's largest uncut diamonds for US$6.5 million at a New York auction on Monday to raise funds for development projects in the West African country.

The egg-sized gem - known as the "Peace Diamond" - was bought by British luxury jeweller Laurence Graff, said Martin Rapaport, chairman of Rapaport Group, a network of diamond companies that managed the auction.

"One hundred percent of the value of this diamond, of the auction sale of this diamond, is going to go to the government and the people of Sierra Leone. Never before has this happened," Mr Rapaport told reporters.

The gem was unearthed in March in Sierra Leone's eastern Kono region by a Christian pastor who gave it to the government to handle the sale.

It was the government's second attempt to sell the diamond after it rejected the highest bid of US$7.8 million at an initial auction in the capital Freetown in May.

Ahead of Monday's auction the diamond was shown to some 70 potential buyers and received seven bids, Mr Rapaport said.

"We showed the diamond everywhere. We did whatever we could and that's the best price that we can get from the market today," he said.

The United Nations lifted a ban on diamond exports from Sierra Leone in 2003, though the US$113 million sector is plagued by smuggling.

Diamonds fuelled a decade-long civil war in Sierra Leone, ending in 2002, in which rebels forced civilians to mine the stones and bought weapons with the proceeds, leading to the term "blood diamonds".

REUTERS