Liberia Mineral Development Agreement

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Mineral Development Agreements (MDAs) are mineral rights granted under section 6.6 of the Liberian Mining and Minerals Law. According to a May 2013 audit report commissioned by the Liberian Extractive Industries Transparency Initiative (LEITI), there are seven MDAs active within Liberia's mining sector.[1]

Features

Most terms in Liberian MDAs are negotiable according to the individual contractor, according to the Ministry of Lands, Mines and Energy, but the model MDA has the following features:[2]

  • Can be applied for during or after exploration
  • Initial validity of 25 years, renewable until reserves exhausted
  • Duty-free privileges on mining equipment
  • Free repatriation of profits and dividends
  • Income tax not exceeding 30 percent
  • Maximum size of area: 1,000 square kilometers
  • Exploration Land rental of US $0.25 per acre per year
  • Mining Land rental of US $3.00 per acre per year

Process

In the mining sector, applications for MDA originate when a company has performed sufficient exploration and has determined that it has made a commercial discovery. In general, according to the LEITI, if an area being mined has already been issued with an exploration license on a first-come, first-served basis, no competitive bidding for the MDA is required. But all other rules based on the Public Procurement and Concessions Act (PPCA) apply from the preparation of the procurement plan until negotiations. In case of known mineral deposits in areas that were not granted an exploration license, the PPCA applies in its entirety.[3]

In contrast to the LEITI analysis, Mining Journal wrote in November 2012 that a mining company must enter into an MDA with the Liberian government in order to be granted either an exploration licence or a Class A licence, required for large-scale mining.[4] The model MDA itself does not specify whether an MDA is required for a company to be granted an exploration or Class A licence.

External links

Liberia Model Mineral Development Agreement, 2008

References

  1. Post Award Process Audit - Final Report LEITI website, May 2013.
  2. Mineral Sector Ministry of Lands, Mines & Energy website, retrieved 24 October 2013.
  3. Post Award Process Audit - Final Report LEITI website, May 2013.
  4. West Africa: Guinea and Liberia attracting investment Mining Journal, 23 November 2012.