President George Weah is requesting the Liberian Senate to ratify an agreement between the Government of Liberia and BAO CHICO Resources Liberia Ltd.
According to the communication from the President, the Mineral Development Agreement between the Government of Liberia and BAO CHICO Resources Liberia Ltd. is for the extraction of iron ore, to be operated under a Class A mining license for an initial term of 25 years from the effective date.
The communication also indicated that BAO CHICO Resources Liberia Ltd. is a corporation duly organized under the laws of Liberia, TIN Number 500118730 for Mineral exploration and mining in Liberia and on the 12th of August 2008, the company was granted an Exploration License MEL 12005.
The deal is in accordance with Section 1.2 of the Exploration Regulations for the exploration of Mineral Products within the area specified on the license which covered a total area of 87.4km2 within Gbarpolu County.
The company’s License which was renewed on August 15, 2013 is expected to provide direct benefits in the form of employment and government revenues.
In terms of financial benefits, the company shall pay all taxes and duties and conform to all procedures pursuant to applicable Law; the company shall be taxed on its net taxable income at a rate not to exceed 25%; pay the government royalties on all its mineral product sales and transfers for iron ore, a royalty of 4.5 percent determined in accordance with Section 703 of the Revenue Code and for other minerals, as provided in the Revenue Code.
The company when ratified is also to pay into the Government general revenue account a signature fee of US$3 Million Dollars, payable according to the following schedule: (i) US$1.5 million within 30 business days of the effective date; (ii) US$1 million on the first anniversary of the effective date; and (iii) US$0.5 million on second anniversary of the effective date for the period of 10 years following the effective date, the Company shall pay an annual lump sum amount of US$60,000 to be paid in two installments of US$30,000 each on January 15 and July 15 of each Calendar Year.
Accordingly; pursuant to Section 18.4 of the Mining Law, the company shall make one-time contribution of US$10,000 to the Mineral Development Fund, payable on the Effective Date pay an annual surface rental fee for all land within the Production Area of US$50,000 from the effective date up to the fifth anniversary of the effective date; from the sixth anniversary through the Term, the company shall pay an annual surface rental fee for all land within the Production Area of US$30,000. In terms of social/economic benefits, as part of its social contribution, BAO CHICO Resources Liberia Ltd. is expected to provide the followings; an annual social contribution of US$300,000 commencing on the effective date until the fifth anniversary of the effective date; and an annual social contribution of US$500,000 from the sixth anniversary of the effective date until the end of the term.
A General Education Funding of US$30,000 to Gbarpolu County, contribute annually through a company’s administered program, pay a Scientific Research Fund of US$50,000 annually, commencing on the start of commercial production and payable thereafter on the anniversary of the effective date through the term adding, “This amount shall be paid into the general revenue account of the Government for the Scientific Research Fund aim at generating geo-scientific data and information.”
The release from the Senate Press and Public Affairs quotes the draft concession as saying, apart from the benefits listed, the company is also expected to provide to the People of Liberia the followings: the company shall, from the start of Commercial Production, either directly or indirectly, ensure access to housing for the employees of the Company and any such contractor and shall ensure that such housing has provisions for bathroom facilities and conforms to minimum standards to be agreed between the Government and the Company and approved by the Ministry of Public Works, upon the commencement of construction of Mining Plant and Infrastructure, the Company shall construct, operate, and maintain or cause to be constructed, operated and maintained during operations, health facilities to ensure the availability in the Production Area a 24-hour emergency medical treatment, care and attention, constructed in accordance with applicable Law, and such other improved standards as may be agreed between the Parties with all such emergency health facilities among others.
The plenary of the Liberian Senate has mandated the Committees on Concessions, Lands, Mines and Energy and Judiciary to review a communication from the President and report to plenary one week after the Legislative Break in January of 2022.