Liberia News: CHINA UNION ADMITS

By Moses M. Tokpah

Monrovia-February-27-TNR:China Union Investment (Liberia) Bong Mines CO., LTD) has openly admitted to violating the Mineral Development Agreement it signed with the Government of Liberia 15 years ago (2009).

China Union through a written communication signed by its deputy manager, SHEN YI HONG (KEN SHEN) made the admittance when he appeared before the House of Representatives’ Joint Committee including the committee on good governance and reform, the committees on telecommunication, health, judiciary, contract and monopoly, and concession for the second time to provide an update on the implementation of the MDA and its plan for the remaining 10 years of the MDA.

It can be recalled that the Representative of District #7, Bong County, Foday E. Fahnbulleh on February 13, 2024 wrote a letter of complaint against the company to the 55th National Legislature over the violation of the 2.6 billion dollars Mineral Development Agreement signed in 2009.

Rep. Fahnbulleh in his communication reminded the Legislature that China-Union entered into a Mineral Development Agreement on January 19, 2009, as a result of a general solicitation for bid proposals for the exploration and mining of Iron Ore issued by the Government of Liberia on January 23, 2008 in a document called the “Bong Range Tender.”

He informed the body that the Mineral Development Agreement (MDA) grants China-Union Hong Kong and China Union Bong Mines (jointly as concessionaire) the rights to explore, and mine iron ore in the Bong Range and that he details contained in the MDA were accepted by the Concessionaire.

The MDA among other things, Rep. Fahnbulleh said provides for the Concessionaire to conduct Social Impact Assessment, develop a Social Action Plan, implement a Skills and Technology Development Plan, and renovate all existing roads in the concession areas including renovating, extending and building the Kakata to Handi Road.

Additionally, the Lawmaker stated that the Concessionaire, in keeping with the MDA is also responsible for providing an annual social contribution of US$3.5 million to communities within the concession area, providing a general education funding of US$250,000.00 annually for scholarships, and operation of a Mining and Geology Institute at the University of Liberia.

He continued that the MDA also provides for the employment of 70% Liberians within the ten most senior positions within the Concessionaire in ten years. Under the MDA, Hon. Fahnbullehnoted that the Concessionaire is expected to generate 230MW of electricity with 130MW being produced from a Hydro-Power Plan on the St. Paul River near Handi.

In addition to these, he narrated that the Concessionaire is expected to operate and maintain an up-to-standard health facility within the concession area as well as pay a land rental fee of US$100,000.00 in the first ten years and US$250,000.00 per year for the next fifteen years.

But the lawmaker said since the effective date of the MDA, the Concessionaire has conducted operations within the concession area including Bong Mines which falls within his district.

He recounted that January 19, 2024, marked the 15th anniversary of the

MDA but regrettably, the terns of the MDA have not been respected as the Kakata to Handi Road remains uncompleted; St. Paul flows without a Hydro Power Plant, and the medical facility and scholarships among other issues remain a mirage.

“Last to mention, the employment quota and conditions of Liberians per the MDA have not been respected. Ten years from now, the MDA will mark its 25th year which should end the terms of the agreement,” he said in the communication.”

Rep. Fahnbulleh then implored the House of Representatives to take seize of the MDA and ensure that it invites China Union to provide an update on the implementation of the MDA and its plan for the remaining 10 years of the MDA; and to also invite the Minister of Lands, Mines and Energy, Minister of Finance and Development Planning, National Investment Commission, and Minister of Justice to provide an update on the implementation rate of the MDA given that they signed the MDA representing the Government of Liberia and that the Minister of Lands, Mines and Energy is responsible for supervision and inspection.

He also requested that the body initiates a full review and an audit of the MDA implementation, beginning with a public hearing adding that these measures will not only bring reprieve to his people and residents of other areas who have borne the brunt of this willful neglect by China Union and the Government, but also show their determination to work for the people and ensure accountability.

But the management of the company in the recent communication acknowledged with respect the issues involved in the ongoing hearings by the joint committee centering greatly on non-compliance with the detail implementation of the Mineral Development Agreement entered into by China Union Investment (Liberia) Bong Mines Co., Ltd., and the Government of Liberia since 2009.

The China Union Management said while it is true that their compliance has exhibited lapses in the execution of their responsibilities under the MDA, it hastens to inform the body that there has been challenges that are both local and external.

“Now that we have commenced operations and are working to ramp up our production capacity to the maximum feasible level, we are determined to remain in full compliance with our MDA and its related responsibilities, the management asserted.

The management requested the committee’s consideration on several proposals which are intended according to them to enhance the desired results being demanded by the committee.

The China Union Management requested immediate-term interventions in the period of 90 days to set up a joint working group to identify feasible intervention activities that can be implemented in the immediate and medium terms, to initiate the implementation of immediate-term activities.

In addition to that, the management requested that a letter to the house’s joint committee on compliance medium-term interventions in 180 days to regularize all its non-compliances and to jointly plan for an early review of the MDA.

The management in the communication said it anticipates the committee’s positive reaction to these proposals as a way of moving forward. As a prelude to the beginning of the Immediate Term Interventions the China Union management also requests that the committee allows it two weeks to complete the submission of documentation requested by the body.

“Towards this end, it is also our fervent request that heretofore you will allow these matters to be discussed outside the public glare, in order to ensure efficiency and to bring dignity to the process and also, to provide assurances to our financiers as well as to other interested investors that indeed Liberia is a good investment destination and the country is investment friendly,” the management requested, but said request was denied by the Chairman of the committee, Rep. P. Mark Jurry.

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