The Hummingbird Gold Pitch in Sinoe—What’s in It for Liberia?


Liberia last Thursday signed a US$100 million gold mining Agreement with Hummingbird Resources (HUM) for mining operations in Sinoe County. Given so many other concession agreements that have experienced serious labor and community disputes, especially in that same Sinoe, and also Nimba and elsewhere many questions arise.

The first is, what will be Hummingbird’s fate? Is the company ready to fulfill all the promises it has made in that Agreement? Are the Sinoe people ready to receive and work harmoniously with another concession? What will make the difference?

National Investment Commission Chair Etmonia Tarpeh seized the opportunity to welcome Hummingbird as a tangible indication that Liberia is on the rebound following Ebola. This is true even as three new cases have emerged in recent weeks. But the worst is indeed over. What we must now do is to continue strictly observing all the measures, including keeping hands, our homes and surroundings clean and obeying all the other measures.

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.

Our Business Reporter David Yates says HUM will, on an annual basis commencing on the first anniversary of the effective date of the Agreement, 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 GOL’s Economic Recovery Plan (ERP), HUM 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.

These stipulations are encouraging indications that the Liberian government and people stand to gain considerably from this Agreement, but . . .
The first, and this is a very big but, is our hope that the 53rd Legislature will this time demand no payments, often interpreted as “bribes,” before ratifying this Agreement. Let the “Honorables” be truly honorable this time and hence forth and perform their oversight duties as they are being paid to do, without expecting from anyone any kickbacks whatsoever.

The Ministries of Lands, Mines and Energy and of Justice, the Inter-ministerial Committee and the National Investment Commission must all instantly recall what happened to Clemenceau Urey and other former board members of the National Oil Company of Liberia (NOCAL), who were advised by the entire Board, by the Ministry of Justice and by top Central Government authorities to “pay the Legislators the money they want” to ratify the oil block agreements.” Then the same government turned around and sent Clemenceau, etc. to court for “corruption,” until the GOL, terribly embarrassed, had to withdraw the case.

So the ground rule in the case of the HUM Agreement is: absolutely no bribes, no kickbacks for the “honorables” in the Legislature. We hope this is crystal clear, emphatic and resolute.

The second thing we hope for is that the lawmakers will stay clear of any involvement whatsoever in the disbursement of the Social Development Funds, which is a function purely intended for the Executive branch to execute.

We think this is an important reminder because we have seen over the past 10 years of this administration that so much of the SDFs have been squandered, with the tacit involvement of county Legislators. This has resulted in the failure of these funds to reach the ordinary people who need it most for the improvement of their communities and lives. This has almost totally defeating the whole intent of the funds.

At least one Observer online commentator has suggested that GOL should negotiate a 35% share HUM. But this leads us to offer a strong warning: remember, the Liberian government had a strong percentage—50%, we think—in LAMCO, and therefore got nothing directly out of the deal, why? Because LAMCO’s Swedish managers every year declared losses! So there was nothing to divide!

The only thing Liberia got out of it was withholding taxes from the handsome fees LAMCO paid its Liberian employees. LAMCO also brought in all its equipment duty free!
So we tell our online and all other readers, be careful what you ask for.


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