According to report, these companies are allegedly operating without meeting their obligations consistent with the Mineral Development Agreement signed with the Government of Liberia.
Mining companies such as Arcelor Mittal, BHP Billiton, China Union, Western Cluster and Putu Iron Ore Mines are said to have failed to pay monies they owed to the counties for Social Development purposes.
Dr. James Kollie, Deputy Finance Minister for Fiscal Affairs informed the House of Representatives Thursday that no money with regard to the MDA has been committed by the mining companies as of the year 2015.
Dr. Kollie told plenary that these companies met with the Government of Liberia and explained that the global financial crisis which affects Iron ore and Rubber, Liberia’s two largest export commodities, have affected their operations in terms of income generation from sales.
“These companies have met with the government and requested for full weaver because there are challenges with cash flow, but the government denied their request,” Dr. Kollie told the lawmakers.Dr. Kollie’s response was based on an inquiry extended to the Ministry of Finance and Development Planning to explain why in the current 2016/2017 fiscal budget, SDF (Social Development Fund) for Nimba, Bong and Grand Bassa Counties were reduced by 50 percent.
The Arcelor Mittal MDA calls for Nimba County to receive US$1.5M annually, Bong County US$500K annually and Grand Bassa County US$1M annually.
But continuing, Dr. Kollie said figures placed in the draft national budget currently at the national Legislature with regard to the SDF were just a proposal that could be changed by that august body.
He said “we have decided just to put something there because there have been no payment as of date concerning the Arcelor Mittal MDA, and other mining companies financial obligations to Liberia,” he noted.
He further noted that “as we speak, Putu Iron Ore has left the country; Western Cluster and China Union have shut down and only Arcelor Mittal operates at the moment,” Dr. Kollie stressed.
Providing input on the matter, Bong County Rep. George S. Mulbah termed as disappointing the action by mining companies in the country. Rep. Mulbah said it was prudent for companies to cease operations since they are not prepared to make SDF payments.
Rep. Mulbah noted that the MDA is a law passed by the legislature and any attempt by mining companies not to commit themselves to financial obligations in the form of SDF was clear violation of the law that warrants penalties.
He added that if the need arises, it will be better to make a decision so that companies which have violated the law to be shut down because they are using the resources without benefit coming to the people.
For his part, Rep. Gabriel B. Smith of Grand Bassa County expressed the need for mining companies to make available their profit level before and during the global financial crisis.