By George Randall, GNN Legislative Reporter
The plenary of the House of Representatives has unanimously voted to ratify the Mineral Development Agreement between the Government of Liberia and the Bao Chico Resources of Liberia Ltd.
Plenary took the decision Tuesday November 30, 2021 following a report from a joint Committee on Concession & Investment, Mines & Energy, Ways, Means Finance Development Planning and Judiciary.
Accordingly, 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.
BAO CHICO Resources Liberia Ltd. is a corporation duly registered 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 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 the 15th of August 2013, is expected to provide direct benefits in the form of employments and revenue generation.
In terms of financial benefits, According to the report 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 percent; pay the Government’s 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 for in the Revenue Code and pay into the Government’s general revenue account a signature fee of US$3 million, payable according to the following schedule: that 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.
The report further stated that in the space 10 years following the effective date, the company shall pay an annual lump sum amount of US$60,000 to be paid in two instalments of US$30,000 each on January 15 and July 15 of each calendar year.
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$80,000 to Gbarpolu County, contributed annually through a company 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.
This amount shall be paid into the general revenue account of the Government for the Scientific Research Fund aimed at generating geo-scientific data and information.