Forty-one members of the House of Representatives, in its Chambers on Thursday, June 14, at its 37th day sitting, concurred with the Senate to ratify the Mineral Development Agreement (MDA) of Hummingbird Resource (Liberia) Incorporated.
The House unanimously approved the MDA of Hummingbird, following a report from the Joint Committee on Lands, Mines, Environment and Natural Resources and the Judiciary. The Committee was mandated by the House Plenary on Tuesday to scrutinize and review the Hummingbird Resource (Liberia) deal and report within 48 hours after it was forwarded by the Senate upon its passage.
The deal was submitted by former President Ellen Johnson-Sirleaf to the Senate during the 5th session of the 53rd Legislature, and was read and adopted on its 1st reading and sent to Committee Room on Monday, June 11, 2017, during a special sitting.
A year later on Monday, June 11, the Senate, through its secretary, J. Nanborlor F. Singbeh, wrote House Speaker Bhofal Chambers, informing him that the “Act to Ratify the MDA between the Liberian government and Hummingbird Resources (Liberia) Inc.,” was passed by members of the Senate.
Mr. Singbeh said the second reading of the Bill constituted the third and final, and that the Bill was adopted, passed into law, ordered and engrossed.
Hummingbird, a gold mining company, will be operating in Maryland, Grand Kru, Sinoe and River Gee Counties, because the Columbite-tantalite known as Coltan gold has been discovered in those counties.
Senate 2016 Hummingbird Report
It can be recalled that in November 2016, the Senate Joint Committee on Lands, Mines, Energy, Natural Resources and Environment, Judiciary, Claims, Human Rights and Petitions, Investment and Concessions, recommended to the plenary of the Senate to postpone the ratification process of the proposed MDA between the government and Hummingbird Resources (Liberia) Incorporated, pending some explanations from the Executive.
According to the joint committee’s report, principally the lumping of four exploration licenses into a single MDA, instead of four separate MDAs and the lack of a plan towards the development and mining of the over four million ounces of inferred gold resources discovered in Sinoe County, are concerns that need explanations from the Executive.
The committee in its concluding report to plenary, noted that the lumping together of the four exploration licensed areas into a single MDA instead of four in line with the New Minerals and Mining Law approved on April 3, 2000, will lead to revenue loss to the government in the tune of millions of United States dollars, “and significant reduction in social development funds and other benefits to the affected communities in Sinoe, Grand Kru, River Gee and Maryland counties.”
Besides the loss of revenue and benefits, the committee maintained that the areas could be susceptible to limited and impetuous exploration work, which could result into some of the areas prematurely and unjustifiably been declared uneconomical and making them relatively unattractive for future investment.
In the findings of the committee, during the formulation of the MDA, there should have been a provision setting aside a production lot (s) over the areas in Sinoe where the gold has been discovered or the company given a maximum of one year to declare production areas.
“Allotting the company five (5) additional years for exploration over these areas containing a gold resource after exploring for 10 years is excessive and the legal, technical and economic bases are debatable, ” the report concluded.
History of Hummingbird Gold Pitch
In July 2015, a US$100 million gold mining Agreement with Hummingbird Resources (HUM) for mining operations in Sinoe County was signed between the Company and the Government of Liberia, but with the modification of the Bill and the addition of Maryland, Grand Kru and River Gee counties, there is yet to be known whether the worth of the signature of the Agreement, signed and granted as well as the mining license will remain the same.
In the previous agreement, as of July 2015 and 2016 respectively, when submitted to the Senate, the company is to pay the government a US$1.5 million signature fee once the Agreement is ratified by the Legislature, and another US$1.5 million on the granting of the mining license.
Hummingbird on annual basis commencing on the first anniversary of the effective date of the Agreement, will contribute an amount to the Social Development Fund (SDF) for the affected communities, which means those areas in which the company will do its mining. The SDF during years one and two will be US$100,000; years three and four, US$150,000; years five to 10, US$200,000; and years 11 onward, US$250,000 throughout the 25-year Agreement.
The company will also pay all other taxes and duties. In keeping with Government of Liberia’s Economic Recovery Plan, Hummingbird will give first priority to qualified Liberians for employment, help improve workers and community education and health and give preference to Liberian suppliers in terms of procurement.