The Senate Joint Committee on Lands, Mines, Energy, Natural Resources and Environment; Judiciary, Claims, Human Rights and Petitions and Investment and Concessions, yesterday recommended to the plenary the postponement of ratification of the proposed Mineral Development Agreement (MDA) with Hummingbird Resources (Liberia) Incorporated pending certain explanations from the Executive.
According to the joint-committee report, the lumping of four exploration licenses into a single MDA instead of four separate ones and the lack of a plan in the MDA 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 license 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 to the tune of millions of United States dollars and “significant reduction in social development funds and other benefits to the affected communities and to Sinoe, Grand Kru, River Gee and Maryland counties.”
Besides the loss of revenues and benefits, the committee maintained that the areas could be susceptible to limited and reckless exploration work, which could result in some of the areas prematurely and unjustifiably being 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 was discovered or the company given a maximum of one year to declare production areas.
“Allotting the company five additional years for exploration over these areas containing a minable gold resource after exploring for 10 years is excessive and the legal, technical and economic bases are debatable,” the joint committee concluded.
The ratification of the MDA between the Government of Liberia (GoL) and Hummingbird Resources (Liberia) Inc. is one of several documents sent to the Legislature after President Ellen Johnson Sirleaf recalled the lawmakers through a proclamation.
Meanwhile, the conference committee of both Houses yesterday presented to the Senate plenary, in its 7th Day Special Sitting, a recommendation for ratification of the Act for the Establishment of the Gola Forest National Park with a few modifications.
The Senate joint committee also recommended for ratification the proposed Investment Incentive Agreement between Sethi Ferro Fabrik Incorporated and the GoL.
The proposed agreement seeks to construct a scrap recycling plant to produce steel products for Liberia and neighboring markets.
“It is expected that this project will be a source of cheaper steel products than those imported into the country,” the document said.
The committee disclosed that the company proposes to invest in excess of US$20 million during the life of the project, which will create jobs, help clean the environment of unwanted scrap materials, contribute to the revenue intake of the GoL, and promote the economic development agenda of the country.