House Halts Bao Chico Deal

The House of Representatives has unanimously refused to concur with the Liberian Senate on the passage of the “Act to Ratify the Mineral Development Agreement between the Government of the Republic of Liberia and the Bao Chico Resources Liberia LTD.”

The House’s Plenary, in an unanimous ‘yea’ on Tuesday, November 9, 2021; the 6th Special Day Sitting, voted not to act on the Mineral Development Agreement of the Bao Chico Resources Liberia LTD and mandated Chief Clerk Mildred Sayon to return the Senate’s version of the ratified legislation.

The Senate, through its Secretary, J. Nanborlor F.   Singbeh, Sr., wrote the Speaker and Members of the House of Representatives that the “Act to Ratify the Mineral Development Agreement between the Government of the Republic of Liberia and the Bao Chico Resources Liberia LTD” was passed by the Liberian Senate on Tuesday, November 2, 2021 at the hour of 16:16 GMT, thus seeking the House’s timely concurrence.

The Lawmakers said the Senate's action was in violation of Article 34 (d) (i) of 1986 Liberian Constitution, arguing that bills to raise revenues must originate in the House of Representatives.

Lofa County District #3 Representative Clarence Massaquoi, through a motion, said despite efforts to strengthen coordination and collaboration between the Houses, it has been observed that the Senate has overstepped its constitutional role and in violation of Article 35 and therefore their request for concurrence should be turned down. 

The motion received a unanimous ‘yea’.

Article 34 (d) (i) of the constitution says: “all revenue bills, whether subsidies, charges, imports, duties or taxes, amendments as on other bills, shall originate in the House of Representatives, but the Senate may propose or concur with amendments as on other bills.”

Interestingly, however, the House’s refusal to concur comes after a series of news reports and editorials by the Daily Observer calling for transparency and full disclosure of the Bao Chico mineral development agreement (MDA). The newspaper’s latest editorial on the subject, published online on Monday, November 8 and in print the following day, said that the “MDA has sailed through the Senate without even an ounce of real scrutiny by stakeholders in the affected communities, as well as Civil Society and the public at large.”

The fate of the BAO CHICO deal now rests with the House of Representatives, the editorial warned, the last stop before it becomes law and commits the Government and People of Liberia for a whopping 25 years.

The move by the House of Representatives to withhold concurrence based on a technicality -- a constitutional violation on the part of the Senate -- might be the opportunity the House needs to do the right thing: consult with experts, hold public hearings and give affected communities to weigh in on the MDA. 

The Concession is a 25-year agreement with an investment in the tune of US$500 million.

With exception of Senators Darius Dillon of Montserrado County and Nyonblee Karnga-Lawrence who voted against and abstained, respectively, all senators who were present in Tuesday’s session voted for the concession to be ratified.

The Mineral Development Agreement between the Government of Liberia and BAO CHICO Resources Liberia Ltd is for the extraction of iron ore, to be operated under a Class A Mining License for an initial term of 25 years from the effective date.

The President also indicated that BAO CHICO Resources Liberia Limited is a corporation duly registered under the laws of Liberia, TIN Number 500118730, for mineral exploration and mining in Liberia. On the 12th of August 2008, the company was granted an Exploration License MEL 12005 in accordance with Section 1.2 of the Exploration Regulations for the exploration of Mineral Products within the area specified on the license which covered a total area of 87.4 square kilometers (km²) within Bomi County, according to 2014 LEITI report. 

Meanwhile, the Daily Observer has obtained a copy of the document from a government source and is having experts review the document in the coming days. 

The MDA, it was recently revealed, is for a concession area in Gbarpolu County, where the company has no record of exploration under the license given. Gbarpolu County is known more for diamond and gold deposits than for iron ore. 

But Bao Chico insists that it will be mining iron ore in Gbarpolu County. The company has received an endorsement from China Union Investment (Liberia), through a letter addressed to Mines and Energy Minister Gesler Murray, acknowledging ‘ongoing discussions’ between the two Chinese mining companies concerning the use of existing Liberian rail and port infrastructure within the China Union’s concession area. 

The letter concludes with the disclosure that “Bao Chico and China Union both share similar shareholders: Baosteel Resources (International) Co., Ltd and China-Africa Development fund, respectively.” 

There are questions to be answered concerning how Bao Chico plans to share the rail infrastructure used by China Union, for example. According to the Republic of Liberia Planning and Development Atlas (1983), there is no rail infrastructure in Gbarpolu County. Thus, Bao Chico would need to build a rail extension from the China Union concession area in Bong Mines, connecting northwest to its mine in Gbarpolu, in order to convey iron ore to Monrovia. 

However, in the absence of China Union activity currently on the existing rail line, there is still a lot of ongoing commercial activity along the railroad. Local traders use the makeshift push carts fitted on the train track to transport agricultural produce to market hubs along the railroad between Bong Mines and Duala. Such use of the railroad by non-concessionaire actors has become a key economic input for communities that are too rural to affordably transport goods by other means. Their use of the railroad keeps prices low and speeds up access to markets. 

There are other issues impacting the communities, labor practices, environment, taxation, finance, which the Observer, through a pool of Liberian experts in and out of Liberia, will analyze from the MDA