Liberia: Can the New Mines & Energy Minister Tame Mining Sector?

— If Paye is to succeed, he must prepare himself to face the onslaught of the cartels, including Gao Feng, staff told the Daily Observer

Many stakeholders in the mining sector are said to have breathed a breath of relief when President Joseph Nyuma Boakai appointed Unity Party strongman and former Chairman, Wilmot Paye, as Minister at the Ministry of Mines and Energy (MME).

They believe he will bring his well-known toughness and straightforward attitude to a ministry that needs to be rescued more than anything, as it has been taken over by cartels with varying vesting interests. Many stakeholders in the sector believe that if Liberia is to be rescued as promised by the UP government, the mining sector of the country should be the first to be saved from drowning.

As per President Boakai’s own admission, he, in a frank interview with Reuters in late 2023 that the mining sector has been a problem for the country, with resources being exploited while the lives of the people remain unchanged.

“To be frank with you, the mining sector has been one of the problems in this country. I have seen our resources exploited, and the lives of the people remain the worst,” Boakai said.

Against this backdrop, President Boakai has expressed his commitment to implementing crucial reforms in the mining sector, aiming to ensure that Liberia benefits from its abundant natural resources. After his election in November, he pledged to thoroughly examine mining concessions to ensure that Liberia benefits from its rich mineral reserves. With his reform processes about to be rolled out, he has chosen Paye, a confidante of many years, to lead the process.

But it would take a lot more if Paye and his boss were to succeed, as the former UP Chairman takes over a sector that is practically controlled by cartels, according to employees at the ministry.

Can Paye Clip Wings of Gao Feng, Others?

If Paye is to succeed, he must prepare himself to face the onslaught of the cartels, staff said in a telephone interview on Wednesday. The foremost ringleader of the cartels hovering over the mining sector, he said, is Gao Feng.

Popularly known within the mining sector, especially at the Ministry of Mines and Energy (MME), Gao Feng, a Chinese national, is the most powerful and influential ringleader controlling the mining industry.

“These are the fights Paye is coming to face, so he better prepare himself,” senior level staff at the ministry told the Daily Observer in an interview. “Gao does not only control the sector, he controls the ministry, and has been doing so for years.”

Gao Feng’s influence, he said, is boundless. Reports indicated that he had many of the past ministers under his control and would refer to them as his subordinates. When he enters the Ministry of Mines & Energy, it is said that high-ranking officials show deference to him by falling on their knees to greet him.

However, Gao Feng’s influence continues to create fear among subordinates, as he is known for revoking licenses to fulfill his interests. According to a former staffer at the ministry, Gao Feng provides financial support to those who support him. This was demonstrated when licenses held by NEO Global Mines & Minerals Inc. were revoked and, within a remarkably short timeframe, awarded to Scott Investment Incorporation, his interest.

There are allegations that Gao Feng paid his subordinate ministers a sum of US$250,000 not to sign NEO Global Mines & Minerals Inc.'s Reconnaissance License. It is further alleged that he facilitated the issuance of Two (2) Exploration Licenses for the same area to Xin Li Da Investment Development Ltd.

According to accounts, Gao Feng had a meeting with the CEO of NEO Global Mines & Minerals Inc. on August 20, 2023, at the Royal Hotel. During the meeting, the CEO questioned Gao Feng about mining activities taking place within their licensed area. Gao Feng allegedly responded by asserting his authority and stating that he could engage in mining activities even in areas like the Executive Mansion, without any necessary license.

He is accused of conspiring with former subordinate ministers at the Ministry of Mines & Energy to use Scott Investment Incorporation in an application for the same area already granted to NEO Global Mines & Minerals Inc. for exploration. This action violated the Mineral and Mining Act of 2000, which specifically prohibits the issuance of mining licenses for areas already subject to valid mineral rights granted to other individuals. Nevertheless, it is surprising that a termination letter was issued by the former ministers on November 20, 2023, and within only 29 minutes, at 16:13 on November 21, 2023, the exploration license for the same area was approved for Scott Investment Incorporation.

Such swift actions raise concerns about compliance with the Mineral and Mining Act of 2000, which requires a two-month notice period for revocations to take effect. Additionally, the Exploration Regulation of 2010 outlines the process of termination, including the right of the license to request a hearing to contest the termination.

However, it appears that these legal procedures may not have been followed in this case. In light of these events, it is evident that there are issues within Liberia's mining sector that need to be addressed to ensure transparency, fairness, and accountability. Only with proper governance and the protection of stakeholders' rights can the mining industry in Liberia truly benefits the local population and attract much-needed investment. The government needs to restore trust in the sector and address the concerns raised by both investors and the citizens of Liberia.

“A lot has happened here and the new minister needs to prepare himself to rescue this ministry and sector,” another employee said. “There are a lot of cartels that are controlling things here, but Gao is the biggest of them all. This is why you hear everybody talking about him. So if Paye and Boakai are to succeed in their reform process, they must first succeed in taming the Real Minister or else he will swallow them as he has done others.

Efforts to talk to the newly nominated minister did not materialize as his phone rang endlessly when called multiple times on Wednesday. Meanwhile, an aide to Gao Feng told this writer last week that Gao will speak to the press when he is ready to do so.