Good News for Deprived Southeast – News Investments Sparkle Hopes & Smiles

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The largest Liberian region of Southeast, which for political and geographic reason has been deprived socially and economically, has now got all reasons to smile and be hopeful of better times in the immediate future. All this is to happen because the Government of Liberia and two well-prepared international concessionaires that are opting to invest US$34m and US$250m in the Southeast have reached solid investment agreements. The deals, according to the National Investment Commission, have already been sealed and citizens of the long-neglected region have been celebrating. The Analyst reports.

There are sparkles of lights hovering over the horizon in the forest-infested region of the South Region in wake of the consummation of two potentially worthy concessions brokered between Government and two concessionaires.

In one of the concessions signed January 9th, 2019, the Government of Liberia through the National Investment Commission (NIC), Ministry of Finance & Development Planning, Ministry of Agriculture, and Golden-SIFCA signed a 28-year Investment Incentive Agreement (IIA) for the development, construction and operation of a US$34M oil palm processing plant in Pleebo, Sodoken District, Maryland County.

The Government, represented by the Inter-Ministerial Concession Committee (IMCC) headed by the Chairman of the National Investment Commission, Hon Molewuleh B. Gray, indicated that the by the signing of this agreement is a manifestation of the Government’s commitment to enhancing value addition and ensuring the that resources of the country is processed locally. The representatives of the IMCC include the Office of Legal Advisor to the President, the Minister of Mines & Energy, Minister of Finance & Development Planning, and the Minister of Justice. Golden-SIFCA was represented by Alassane Doumbia, CEO of SIFCA Group.

Golden-SIFCA is a joint industrial Agric based venture between Golden Veroleum Liberia Inc. (GVL), and Maryland Oil Palm Plantation (MOPP), two existing oil palm concessions with operations in Sinoe and Maryland counties. Both Companies have come together with the common aim of boasting the development of their oil palm operation and in fulfillment of their respective obligations to construct oil palm processing facility.  The oil palm processing facility will have the capacity of processing at least 80 Ton Per Hour of crude palm oil. The company is also accessing the technical and economic feasibility of building a composting plant to recycle oil palm waste into fertilizer, set up a biogas plant (fed by oil palm solid/liquid by-products) to produce electricity at the service of the joint venture.

The Golden-SIFCA agreement conclude the review and renegotiation by the IMCC through thorough due diligence, analysis, and evaluation.  The Investment incentive proposal, will create about 180 direct jobs and around 500 indirect jobs during the operation and expansion phases in technical and skilled positions. Additionally, the Golden-SIFCA project will contribute significantly to development activities in the project area including, construction, usage, improvement, and maintenance of roads, bridges and other transportation facilities; provision of modern health facilities; supply of safe drinking water for all employee residential communities; provision of adequate shared housing facilities for employees; medical care and free primary and high school education among others. In keeping with the Government’s “Pro-Poor” Agenda for Prosperity & Development (PAPD), the Government has ensured that the IIA socially obligates Golden-SIFCA to among other things, give first priority to qualified Liberians in terms of employment, and give preference to Liberian suppliers in terms of procurement, and obey the Environmental Laws of Liberia.

On the second front of the pro-Southeast news as consummated on January 10, 2019, the Government of Liberia represented by the National Investment Commission (NIC), Ministry of Finance & Development Planning, Ministry of Mines & Energy the Ministry of Justice, and Hummingbird Resources Inc (Hummingbird) signed a 25-year Mineral Development Agreement-Gold (MDA) for the development of the largest gold mine in the South-Eastern Region, with an investment size of over US$250M. Hummingbird acknowledges that it has successfully defined about 3.8Moz at 1.24g/t Au, making the project the largest gold discovery in Liberia’s history.

The Government, represented by the Inter-Ministerial Concession Committee (IMCC) headed by the Chairman of the NIC, Hon Molewuleh B. Gray, believe that the signing of this agreement is critical and a highly positive development for the economy. Other Government representatives of the IMCC included the Office of Legal Advisor to the President, the Minister of Mines & Energy, Minister of Finance & Development Planning, and the Minister of Justice. Hummingbird Resources was represented by its Chief Financial officer, Mr. Tom Hill.

Hummingbird Resources Inc is a UK based Gold Mining Company with operations in Mali and Liberia. Founded in late 2005, Hummingbird Resources is a West African gold producer, developer and explorer (AIM:HUM), which listed on AIM in December 2010. Since Initial Public Offering (IPO) the Company has significantly grown its global resource inventory from an initial 0.8Moz to 6.4Moz across two countries, Mali and Liberia. In 2018, the Hummingbird Resources Inc agreement was re-negotiated by the Inter-Ministerial Concession Committee through thorough due diligence, analysis, and evaluation of the MDA proposal. The signing of the agreement concludes the review and re-negotiation for this MDA.

The Hummingbird project will operate across Sinoe, Grand Kru, River Gee and Maryland counties and directly benefit these counties as well as bringing further benefits to other counties in the southeast which have been isolated in terms of economic activity. Significantly, the southeast corridor will be linked to the rest of the country and its people will share in the economic growth and development of Liberia, something which has been lacking over the years. Through improved education, road connectivity, gainful employment, access to opportunities for development for those in the southeast will be much improved.

Following ratification and publication of the agreement into law, Hummingbird will pay a signature fee of US$3M to the Government of Liberia, US$1.5M to be paid within fifteen (15) days of the Effective Date and thereafter, US$1.5M to be paid on the granting of the Mining License. A Royalty of 3% (estimated to bring in millions of dollars in revenue) is given to the Government of Liberia on Gold revenues.  Additionally, the agreement allows 10% percent shares for Liberians. Hummingbird will also pay all other taxes and duties as set out in a fiscal agreement between the GoL and Humiingbird.

In keeping with the Government’s Pro-Poor Agenda, the Government has ensured that the MDA socially obligates Hummingbird, to, among other things, give first priority to qualified Liberians in terms of employment, help improve access to education and health care, give preference to Liberian suppliers in terms of procurement, and obey the Environmental Laws of Liberia. These key benefits as of the Hummingbird Agreement include:

Over 1,000 direct jobs and around 2,500 indirect jobs will be created by the concession. All unskilled jobs will be given to Liberians while preference will be given to qualified Liberians for skilled labor positions.

Other details of the contract include:

 Roads & Infrastructure:

  • Hummingbird will upgrade the existing road from Greenville to Dugbe to two laterite road for general public use with capacity for handling of heavy traffic to be completed no late that than first anniversary following first commercial production.
  • Hummingbird will maintain and where appropriate rebuilt to extend existing roads within exploration area
  • Hummingbird will construct a two-story permanent building as corporate head quarter in Sinoe County
  • Hummingbird will also help develop, upgrade and maintain the port of Greenville

Education:

  • US$ 50,000 per year for high school and university scholarship to Liberians in the production area.
  • US$ 75,000 per year for the environmental science department of Tubman University
  • US$ 50,000 onetime contribution, to both the scientific research fund and mineral development fund.

  Social Development Contribution: On an annual basis, commencing on the first anniversary of the effective date Hummingbird shall make an annual contribution to the Government through a Community Development fund for the affected communities as follows: Year 1-4: US$100,000 for Sinoe County, US$ 100,000 for Grand Kru, US$ 50,000 for River Gee and US$ 50,000 for Maryland County. Year 5-10: US$200,000 for each Production Area, Year 11 and onward US$250,000, throughout the term of the agreement.

The Chairman of the NIC, Hon. Molewuleh B. Gray, has pledge his support to ensuring that Investors are attracted to Liberia so as to enhance the Government” PAPD Agenda. The Chairman, reiterated his commitment during “the signing of the agreement indicating that the aligning of this agreement is the beginning of brighter days for the people of southeast” as the Hummingbird project will bring many key benefits to the Southeastern region of Liberia in support of the Government’s PAPD.

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