Liberia: Paye Takes On Challenge to Transform Mining, Energy Sectors

“The President has not sent us here to complain or give excuses. As Minister of Mines and Energy, we will not complain. We are required to act,” the newly confirmed Minister of Mines and Energy, Wilmot Paye, said to thunderous applause when he officially took over the ministry at a ceremony on Tuesday, February 5.

As leader of the sector, the former Unity Party chairman noted, “We cannot complain while our minerals and natural resources are being depleted for the sake of 3% or 5% royalties. We are not here to complain.”

He continued, “We will not complain. We cannot complain while would-be investors come here, obtain Mineral Development Agreements, do absolutely nothing to start operations, and sit on the rights granted under those MDAs while we do nothing, especially amid indications that work is not likely to begin in the foreseeable future.”

Minister Paye expressed determination to revamp the mining sector and enhance Liberia’s economic growth. He emphasized a proactive approach and highlighted the need for partnerships with credible investors to maximize the country's natural resource potential. 

Paye noted that Liberia should simply not be striving to survive while sitting atop a vast natural resource potential.

Paye pledged to address challenges and ensure compliance with mining agreements to benefit Liberia's citizens. 

He noted that a new policy approach that enhances the country’s custody and ability to encourage partnerships with credible investors should be thoughtfully considered by his leadership at the ministry.

“We cannot employ 19^th-century natural resource management models to tackle poverty, especially at a time the rest of Africa is moving away from leaving their destiny in the hands of foreign companies,” he said.

Many believe that if Paye is to succeed at MME, a ministry that controls sectors that have the potential to spur economic growth and development, he must prepare himself to face and withstand the onslaught of the cartels that have controlled the mining sector for years.

His appointment, however, was a breath of fresh air and relief for many stakeholders in the mining sector. They believe he will bring his well-known toughness and straightforward attitude to a ministry heavily influenced by cartels with varying vested interests.

“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,” one stakeholder told the Daily Observer a few weeks ago.

Paye has promised to rescue the mines and energy sectors of the country in two years, setting it on the path of being the bedrock of the country’s growth and development.

As per President Boakai’s own admission, he said 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.

As he took over yesterday, Paye agreed to tackle the challenges in the sector head-on, promising not to only live up to his billing, but to meet the expectations of the Liberian people — stressing that his appointment is no mistake and that he is ready for the task.

“We are not here today by chance or coincidence. We are here to help make real the promises contained in the President’s ARREST Agenda,” the former UP Chairman said. “What a critical time to take over this ministry!”

He expressed his commitment to implementing crucial reforms in the mining sector, aiming to ensure that Liberia benefits from its abundant natural resources that would ensure that Liberians are lifted out of abject poverty.

This move is in accordance with a promise President Boakai made after his election in November, pledging to thoroughly examine mining concessions to ensure that Liberia benefits from its rich mineral reserves—a promise he chose Paye, who was a confidante of many years and a trained geologist, who he thinks is best suited to ensure it is actualized.

Paye's reform initiatives include updating existing laws, reviewing licenses, and enhancing regulatory capacity in the mining and energy sectors.

Under his watch, he noted, MME will be made very proactive, ensuring that concessionaires are in compliance with their agreements signed with the government—highlighting that compliance review on concessions across the country is one of the President’s top policy priorities.

The objective of such a review is twofold, he noted, first to establish whether the terms specified in Mineral Development Agreements (MDAs) are being respected and to identify gaps for consideration in subsequent amendments.

“Let me stress here that this is not about targeting any concessionaire, nor is it about discouraging others,” he said while warning staff of the ministry that the various categories of license “this Ministry issues to operators are no additional sources of income for staff and employees. They are tools for regulation.”

Review of Licenses

If Paye is to succeed, he must prepare himself to face the onslaught of the cartels who control the sector and have manipulated the licensing processes of the ministry, a staff of the ministry told the Observer in a telephone interview last week. 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, appears to wield much influence among decision makers in the ministry.

Paye admitted at Tuesday’s ceremony that the situation in the Mineral and Energy sectors has now reached a crisis point. It is now a matter of national economic and security emergency.

“We will therefore undertake a quick review of licenses,” he said. “This will help us to separate legitimate license holders from illegitimate ones.”

For a country that relies heavily on revenue from its mineral resources, Minister Paye added that there is a need to take a critical new look at how the ministry issues exploration licenses.

“Moreover, we cannot be promoting direct and full Liberian participation while at the same time, Liberians holding Class C Licenses are robbing themselves by colluding with foreigners to steal our mineral resources. This Ministry will cancel any such Class C License without delay,” he said.

Paye disclosed that his team will update the Mineral Policy of 2010 and the National Energy Policy of 2009. “The Ministry issues various licenses to operators, including but not limited to A, B, and C. However, after 2018, these licenses were issued by the Ministry of State. Not only was this a usurpation, but it also undermined regulation and thus exposed the mineral sector further,” he alleged.

He also noted that Liberia cannot meet its growing energy demands and that the domestic generation capacity has remained stagnant. While modest progress has been achieved in energy supplies, Paye says aggregate technical and commercial losses may have dropped.

Under his leadership, he said MME will reform energy policies aimed at increasing energy production to meet the country’s growing demands. 

The total installed generation capacity, as per the country’s electricity network, stands at 161 MW. This includes Mt. Coffee Hydro Power Plant (88MW), Bushrod Thermal Plant (38MW), Cross-Border Imports (8MW), and CLSG Imports (27MW).

However, the fire accident of January 2021 that affected one of the four (4) turbines at Mt. Coffee Hydro Plant reduced this capacity to 139 MW. At the same time, arrears for imports make it difficult, if not impossible, to increase energy supplies on the CLSG network from the current 27MW to 50 MW, Paye said.

He disclosed that there is a consistently high solar energy potential across the country with an annual average of 1,712 kWH per square meter. This, he said, means that the country can generate between 1,400 to 1,500 kWh/kilowatt peaks.

Nevertheless, Liberia does not have a solar energy policy, a gap that needs to be closed if the country is to unlock its energy potential.

Against this backdrop and in ensuring other policy reform initiatives, Paye disclosed that his leadership will finalize the Draft Amendment to the Minerals and Mining Law of 2000, review/Update the Mineral Policy of Liberia (2010), and review/Update the National Energy Policy of 2009.

“We will also review Class B and C Licenses to identify legal and illegal license holders, and restructure the Inspectorate and Monitoring Divisions of the ministry,” he said. “Begin Compliance Review with a view of improving production export data, mining contracts & MDAs, capacity needs assessment of regulatory bodies), and establish Sector Working Groups: (i) Mineral (ii) Energy (iii) Donor Coordination.”

He also promised to speed up the formalization of the Artisanal, Small-scale Mining sector, engage the Ministry of Finance and Development Planning, as well as the Ministry of Justice to review CLSG/CI-Energies’ arrears, review existing distribution contracts between LEC and private distributors, enhance internal capacity to upgrade and store geological, and seismic data, and, explore/harness the use of technology to improve regulation.