HOR Probes China Union Over Alleged MDA Violation Following Rep. Fahnbulleh Complaint 

By: William K. Howard

Capitol Hill: The 55th Legislature of the House of Representatives launches investigation on Chinese mining, China Union, for alleged gross violations of their Mineral Development Agreement (MDA).

In November 2009, the Liberian government  signed a $2.6 billion agreement with a Chinese company, China Union, to excavate for iron ore at the country's western former Bong Mines. The agreement, signed during the administration of former PresidentEllenJohnsonSirleaf, is said to be the biggest ever investment in Liberia.

The deal would allow China Union to operate Liberia's former western Bong Mines, which before the civil war was operated by the German-owned Bong Mining Company.

Meanwhile, plenary decision come as a result of a letter of complaint sent to the by Bong county District #7 Representative Foday Fahnbulleh, allegeding that China Union owes the County so much, ranging from roads, medical facilities, safe drinking water, and scholarships, among other basic services.

The House’s Plenary recently unanimously voted for the Committees on Investment & Concession, Mines & Energy, Contract Monopolies, Judiciary, Good Governance, and Labor to probe and report within two weeks.

Rep. Fahnbulleh backed his complaint against the Iron ore mining company saying; "January 19, 2024, marked the 15th anniversary of the operations of China Union in Liberia, but most of the MDA has not been upheld, which puts China Union in complete violation".

“Regrettably, Hon. Speaker and Distinguished Colleagues, the terms of the MDA have not been respected. The Kakata to Haindii Road remains uncompleted; St. Paul flows without a hydropower plant; and the medical facility and scholarships, among other issues, remain a mirage. Least 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,” Rep. Fahnbulleh said.

The Bong County lawmaker further noted that  China Union is deliberately refusing to conduct a 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 Haindii Road. 

Rep. Fahnbulleh further said that China Union, in keeping with the MDA, is falling short of the annual social contribution of US$3.5 million to communities within the concession area; the  provision of general education funding of US$250,000 annually for scholarships, and operation of a Mining and Geology Institute at the University of Liberia. 

He revealed also, the MDA provides for the employment of 70% Liberians within the ten most senior positions within the Concessionaire in ten years. Under the MDA, the Concessionaire is expected to generate 230MegaWatts of electricity with 130MegaWatts being produced from a Hydro-Power Plant on the St. Paul River near Haindii, but none of these, among other things mentioned in the MDA, are being upheld according to the MDA".  

Adding weight to the alleged violation, Fahnbulleh stated 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 unfortunately, all is on the contrary.

The Bong District #7 lawmaker concluded by pleading with his colleagues as they all begin to turn a new chapter in the nation’s history through accountability and adequate representation, it is high time that they as the people’s representatives ensure that all corporate deals, specifically those ratified by the National Legislature, are adequately monitored, and implemented to the benefit of the people and the state hence, implored Plenary to take advantage of the MDA and ensure the following: Invite China Union to provide an update on the implementation of the MDA and its plan for the remaining 10 years of the MDA; and invite the Minister of Lands, Mines and Energy, Minister of Finance and Development Planning, National Investment Commission, and Minister of Labor.

Below is the full text of Rep. Fahnbulleh Letter;

China-Union (Hong Kong) Mining
Ref.: Letter of Complaint against
Company Limited and China-Union Investment (Liberia Bong Mines
Company Ltd.) for the violation of The 2.6 Billion Mineral Development Agreement signed on January 19, 2009.

Dear Honorable Speaker and Members of the House of Representatives,
On behalf of the people of Fuamah and Sanoyea Administrative Districts in Bong
County, greetings!

Hon. Speaker and Members of the 55th National Legislature, China-Union (Hong
Kong) Mining Company Limited and China-Union Investment (Liberia Bong
Mines Company Limited 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. 

For easy reference, attached hereto is a collation of major sections of the MDA.
The Mineral Development Agreement (MDA), Mr. Speaker, 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. The details contained in the MDA,
were accepted by the Concessionaire.

The MDA, among other things, provides for the Concessionaire to conduct a
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 Heindi Road.

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. 

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

In addition to these, 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.

Distinguished Colleagues, since the effective date of the MDA, the Concessionaire has conducted operations within the concession area including Bong Mines which falls within my district. January 19, 2024, marked the 15th anniversary of the MDA.

 Regrettably, Hon. Speaker and Distinguished Colleagues, the terms of the MDA have not been respected. The Kakata to Heindi 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.

Hon. Speaker and Distinguished Colleagues, as we begin to turn a new chapter in our nation's history through accountability and adequate representation, it is high
time that we as the people's representatives ensure that all corporate deals, specifically those ratified by the National Legislature, are adequately monitored, and implemented to the benefits of the people and the State. Hence, I am imploring you to take seize of this MDA and ensure the following:
► Invite China Union to provide an update on the implementation of the MDA
and its plan for the remaining 10 years of the MDA; and invite the Minister of Lands, Mines and Energy, Minister of Finance and
Development Planning, National Investment Commission, and Minister of Labor.