MR. SHERMAN AND WORKMATE
The mineral industry of Liberia is summarize by the below diagram which if permitted, I will refer to as the “Mineral Industry Cycle” of Liberia. However, over the past months the sector has been undergoing severe microscopic review so as to ensure transparency and accountability. While this review is ongoing, I thought it relevant to summarise the country’s mineral sector into one big circle. As we all know, the Ministry of Lands, Mines and Energy (MLME) is the regulatory body of the sector. This entire sector is categorized into the Alluvial mining sector and the Mineral Exploration & Development sector
Figure 1: Unofficial Mineral Industry Cycle of Liberia (By: E.O.Sherman 2006)
In Figure1, the mineral exploration & development sector (MEDS) which is the Department of Mineral Exploration & Research, insures the efficient identification and development of mineral resources by monitoring the activities of license holders in this sector and by the provision of needed and available information to help potential investors. Activities within this sector are dominated by foreign exploration and mining companies involved in the acquisition of up-to-date geospatial data and information. While information about potential geological and mineral-rich targets are being generated by MEDS, the alluvial mining sector (AMS) which is headed by the Department of Mines, monitors and controls the extraction and trade of alluvial diamonds and gold produced by artisans and companies. Revenues generated from the industry are usually paid to the mineral resources revenue (MRR) body and are intended to be used by the GOL for sustainable economic development.
To ensure transparency and proper accountability in the sector, a body comprising of major stakeholders who are also key policy makers are empowered to review and formulate policies that may be implemented by MLME.
The Public Procurement and Concession Commission (PPCC) has now become the latest focus point in the mineral cycle that needs to be updated. This commission has its own legal act on which it exists. However, harmonization of the PPCC Act and the existing Mineral and Mining Law of 2000 could serve as a One-Stop-Regulating document of the country’s mineral industry.
1.0 Existing Policy, Legal and Regulatory Issues
The country has a New Minerals and Mining law of 2000 that is being administered by the Ministry of Lands, Mines and Energy (MLME). One of the key points in this law is the Mineral property rights/Mining Title. Mineral property rights to explore or mine in Liberia are obtained through the acquisition of alluvial mining licenses (either Class C or Class B) and a mineral concession.
Figure 1: Unofficial Mineral Industry Cycle of Liberia (By: E.O.Sherman 2006)
In Figure1, the mineral exploration & development sector (MEDS) which is the Department of Mineral Exploration & Research, insures the efficient identification and development of mineral resources by monitoring the activities of license holders in this sector and by the provision of needed and available information to help potential investors. Activities within this sector are dominated by foreign exploration and mining companies involved in the acquisition of up-to-date geospatial data and information. While information about potential geological and mineral-rich targets are being generated by MEDS, the alluvial mining sector (AMS) which is headed by the Department of Mines, monitors and controls the extraction and trade of alluvial diamonds and gold produced by artisans and companies. Revenues generated from the industry are usually paid to the mineral resources revenue (MRR) body and are intended to be used by the GOL for sustainable economic development.
To ensure transparency and proper accountability in the sector, a body comprising of major stakeholders who are also key policy makers are empowered to review and formulate policies that may be implemented by MLME.
The Public Procurement and Concession Commission (PPCC) has now become the latest focus point in the mineral cycle that needs to be updated. This commission has its own legal act on which it exists. However, harmonization of the PPCC Act and the existing Mineral and Mining Law of 2000 could serve as a One-Stop-Regulating document of the country’s mineral industry.
1.0 Existing Policy, Legal and Regulatory Issues
The country has a New Minerals and Mining law of 2000 that is being administered by the Ministry of Lands, Mines and Energy (MLME). One of the key points in this law is the Mineral property rights/Mining Title. Mineral property rights to explore or mine in Liberia are obtained through the acquisition of alluvial mining licenses (either Class C or Class B) and a mineral concession.
Mineral Titles summary
There are basically two broad categories of mineral titles/rights under the Minerals and Mining Law of the Republic of Liberia: They are:
Exploration Right; and
Mining Right.
2.0 Mineral Property Right
Mineral license types usually issued to eligible candidates wanting to invest in the country’s mineral sector are summarized below:
License type
Key terms and provisions
duration
Reconnaissance
§ To conduct rapid geologic assessment of targeted area;
§ Targeted area must not be encumbered under a valid Mineral Right by another person
§ Renewable once for another six months;
§ Permit area is restricted 2,000 square kilometres;
§ Detail sampling(i.e. drilling, trenching and pitting) are prohibited
§ The Holder may apply and be granted a Mineral Exploration License by the Minister upon completion of the reconnaissance phase.
6 months
Exploration
§ That the area is not encumbered under a valid Mineral Right by another person;
§ Issuance for an initial period of 3 (three) years and may be extended for a single two-year period, in which event the Holder shall be obliged to surrender 50 (fifty) percent of the Exploration Area to Government;
§ That at the end of the initial 3- year period, the Holder may select the entire Exploration Area or any part thereof as a Proposed Production Area;
§ That the area granted shall be contiguous and limited to 1,000 square kilometers;
§ That Holder shall have exclusive right to conduct mineral exploration within the Exploration Area granted and may conduct pilot mining as permitted in the Proposed Exploration Program; and
§ That the Holder shall incur costs in surface rentals as negotiated between the Holder and Government;
§ That the Holder shall submit to the Minister a proposed exploration program within 90 (ninety) days as of the Effective Date of the Agreement; and
§ At the end of the Exploration Program, the Holder may apply for a Class A Mining License.
3 years
+2 years possible
extension
Class A Mining License
The Operator must have successfully completed an Exploration Program that clearly defines exploitable mineral targets;
That the Operator must have successfully completed a feasibility report outlining the efficient and economic conduct of the proposed mining operations;
That the Minister shall have approved the feasibility report which shall have been prepared in keeping with the Law and the application of acceptable international standards;
That the Operator must have conducted an Environmental Impact Study which among other things shall spell out the adverse environmental effects that could result from the mining operations and prescribe mitigating and curative means of restoring the environment;
That the Operator must demonstrate that it has the technical competence, experience, and financial resources to carry out such mining operations in keeping with the requirements specified under the Class A Mining License; and
That the Class A Mining License shall be issued for a period of 25 (twenty-five) years with extensions for consecutive additional terms not to exceed 25 (twenty-five) years each, once proven reserves still exist.
25 years
+
Possible 25 years
extension
CLASS B Mining License
§ That the initial term of a Class B Mining License shall be for 5 (five) years with renewal for periods not exceeding 5 (five) years each;
§ That the Holder can engage in industrial mining;
§ That 15 (fifteen) Holders of Class B Mining Licenses may collectively mine through a cooperative scheme; and
§ That the Holder of a Class B Mining License shall submit a production plan to the Ministry for approval prior to commencement of mining.
5 year
CLASS C Mining License
§ That the Holder of a Class C Mining License shall have exclusive right to mine in the Production Area;
§ That the tenure of a Class C Mining License shall be for a period of 1 (one) year renewable for further terms of one year each provided the Holder remains in compliance with the Mining Law and Regulations;
§ That the size of the Production Area covering a Class C Mining License shall not exceed 25 (twenty-five) acres;
§ That a Class C Mining License shall be restricted to a Small-Scale Operation;
1 year
There are basically two broad categories of mineral titles/rights under the Minerals and Mining Law of the Republic of Liberia: They are:
Exploration Right; and
Mining Right.
2.0 Mineral Property Right
Mineral license types usually issued to eligible candidates wanting to invest in the country’s mineral sector are summarized below:
License type
Key terms and provisions
duration
Reconnaissance
§ To conduct rapid geologic assessment of targeted area;
§ Targeted area must not be encumbered under a valid Mineral Right by another person
§ Renewable once for another six months;
§ Permit area is restricted 2,000 square kilometres;
§ Detail sampling(i.e. drilling, trenching and pitting) are prohibited
§ The Holder may apply and be granted a Mineral Exploration License by the Minister upon completion of the reconnaissance phase.
6 months
Exploration
§ That the area is not encumbered under a valid Mineral Right by another person;
§ Issuance for an initial period of 3 (three) years and may be extended for a single two-year period, in which event the Holder shall be obliged to surrender 50 (fifty) percent of the Exploration Area to Government;
§ That at the end of the initial 3- year period, the Holder may select the entire Exploration Area or any part thereof as a Proposed Production Area;
§ That the area granted shall be contiguous and limited to 1,000 square kilometers;
§ That Holder shall have exclusive right to conduct mineral exploration within the Exploration Area granted and may conduct pilot mining as permitted in the Proposed Exploration Program; and
§ That the Holder shall incur costs in surface rentals as negotiated between the Holder and Government;
§ That the Holder shall submit to the Minister a proposed exploration program within 90 (ninety) days as of the Effective Date of the Agreement; and
§ At the end of the Exploration Program, the Holder may apply for a Class A Mining License.
3 years
+2 years possible
extension
Class A Mining License
The Operator must have successfully completed an Exploration Program that clearly defines exploitable mineral targets;
That the Operator must have successfully completed a feasibility report outlining the efficient and economic conduct of the proposed mining operations;
That the Minister shall have approved the feasibility report which shall have been prepared in keeping with the Law and the application of acceptable international standards;
That the Operator must have conducted an Environmental Impact Study which among other things shall spell out the adverse environmental effects that could result from the mining operations and prescribe mitigating and curative means of restoring the environment;
That the Operator must demonstrate that it has the technical competence, experience, and financial resources to carry out such mining operations in keeping with the requirements specified under the Class A Mining License; and
That the Class A Mining License shall be issued for a period of 25 (twenty-five) years with extensions for consecutive additional terms not to exceed 25 (twenty-five) years each, once proven reserves still exist.
25 years
+
Possible 25 years
extension
CLASS B Mining License
§ That the initial term of a Class B Mining License shall be for 5 (five) years with renewal for periods not exceeding 5 (five) years each;
§ That the Holder can engage in industrial mining;
§ That 15 (fifteen) Holders of Class B Mining Licenses may collectively mine through a cooperative scheme; and
§ That the Holder of a Class B Mining License shall submit a production plan to the Ministry for approval prior to commencement of mining.
5 year
CLASS C Mining License
§ That the Holder of a Class C Mining License shall have exclusive right to mine in the Production Area;
§ That the tenure of a Class C Mining License shall be for a period of 1 (one) year renewable for further terms of one year each provided the Holder remains in compliance with the Mining Law and Regulations;
§ That the size of the Production Area covering a Class C Mining License shall not exceed 25 (twenty-five) acres;
§ That a Class C Mining License shall be restricted to a Small-Scale Operation;
1 year
