By Yusuf S. Sherif
Abstract
This article focuses on the decommissioning and post-closure management plan of a mine site in Liberia. The article accessed the mining concession agreement on decommissioning of the mine site and post-closure management plan that will lead to infrastructural development to generate income, create employment opportunities, spur economic growth and reduce environmental risk for local communities.
The article is a cross-sectional assessment that adopted a qualitative approach. A field trip was made to old mine sites for sight seen experience to enhance a comprehensive understanding of decommissioning mine site and environment impact on the region. The objective of the reclamation and post closure management program is to convert the concession area to an income generating region. Moreover, two old and abandoned mine sites were visited that included Bomi Hill, Bomi County and Bong mine site in Bong County that were used as tools for the assessment. The article also look at various laws and regulation from sources relevant to the mining sector. The field trip provided empirical information which helped derived informed policy recommendations to national government, CSO and stakeholders on how to improve decommissioning and post closure management plan and regulations in all concession agreement in the mining sector to significantly impact sustainable development and infrastructure programs, sustained socio-economic growth, ensure environmental security, and employment opportunities in local region around concession area.
Introduction
Liberia is endowed with an impressive stock of mineral reserves and has traditionally relied on mining, namely iron ore, gold, and diamonds, as a major source of income. In the past, high–grade iron ore was discovered in Bomi Hills, Bong, and Nimba. Natural resources have the basis of the Liberian economy and its people’s livelihood. Iron ore mining was the mainstay of the Liberian economy between 1960 and 1980 contributing more than 60% of export earnings and 25% of GDP ( Samuel T. K. Wilson, 2017), which then ranked Liberia as the largest of exporter of iron ore in Africa, and third largest in the world. Gold and Diamond mining in Liberia was carried largely by alluvial mining, small – scale operations with estimates of over 100,000 artisanal miners in Liberia. But nearly 14 years of civil war (1989 – 2003) destroyed much of the country’s productive infrastructure and mining to halt. The recent growth in the mining sector has the potential to contribute significantly to employment, income generation, and infrastructure development. However, the development of these mineral resources has significant environmental impacts that often go unnoticed. This article presents an assessment on post mining and decommissioning of mine site in the mining sector from historical, current development, and economic perspectives. The efforts made by government to address issues of environmental management and sustainable development expressed in national and international framework, as well as some environmental challenges in the mining sector without being managed after the mine life cycle. Moreover, this article will outline the importance of decommissioning old mine site for infrastructures purpose and management in Liberia.
Historic and economic perspectives
Liberia is a leading country in mineral resources with substantial iron ore, gold, and diamond deposits. Iron ore mining was previously undertaken by American and European companies in the area of Bomi Hills, Bong Mine, Mano River, and Nimba. Those concessions resulted in widespread clearance of tropical rainforest for mines (open – cast pits), processing plants, housing and roads, railways and unmanaged deposit sites. The Nimba mine for instance produced some 300 million tons of mining wastes (unwanted materials) that were deposited in the surrounding forest. Environmental impact assessments had not been conducted at the sites and potential risks were unknown. Samuel T.K. Wilson, 2017
Statistics of government revenues by sector contribution indicates that the mining sector contributed to 53% (USD 53.38 million) of the total revenues during the FY 14/15 (fig.1) and generating about 10,000 jobs. In the same year, the sector faced a drop in demand, production level, and investment, loss of employment as a result of the twin shock – Ebola virus disease and the price of iron ore. The value of the sector production in 2014 was USD 78.85 million (58.3%)
Mine sites experience
In 2013, I was a member of a team of auditors that was assigned to conduct a Compliance audit on China Union Investment Liberia. China Union Investment Liberia is an Iron ore Mining Company operating in Liberia, West Africa. The team of auditors planned a field trip to the mine site of China Union to assess and verified some project, equipment, personnel in the field to enhance the audit findings.
Interestingly, while on our way to the mining site, I was amazed passing through the old and abandoned mining site of the Bong Mining Company (BMC), famously known as Bong Mine.
Sadly, I became devastated when I saw abandoned and broken houses, depleted mine site, deep open pit with very high risk or death trap of our species and human being, threat to our endangered animals, biodiversity and ecosystem and climate change that Liberia is currently experiencing. Besides, China Union went further away from Bong Mine old mine site, at least an hour drive to the Goma Mountain, where China Union is currently mining iron ore.
Seeing through observations how dangerous the mine sites are; the following questions came to mind:
- Were there not provisions in the concession agreement dealing with post mining development or decommissioning plan for the old mine site?
- If there were post mining development or decommissioning plans in the concession agreement, what went wrong? Were there any trust funds to implement developmental or infrastructural projects by either national government or the concession company?
As far as mining is concerned, consistently, there is a life cycle of mining or phases of mining projects, which include the following: Exploration, Feasibility, Planning & Design, Construction, Operations (Progressive Rehabilitation), Decommissioning & closure, and Post – Closure management.
This article emphasizes the implementation of the decommissioning phase and post-closure management of all mining concessions in Liberia.
Planning for mine closure should be done progressively throughout my life of mine. The level and focus on particular details will vary through the cycle, depending on which phase is in or is transitioning to. For the planning to succeed, the management team needs to ensure it is systematized early the life of mine and integrated deeply into the normal business planning and practice of the company and that the company ethos adopts closure planning as normal business.
This approach ensures that the practice flows into planning, consultation, implementation rather than being attended to at the end of the life of mine. The initial ground, even at the exploration phase, can affect the effectiveness and success of closure planning. To ensure optimal results, it is critical that company and its staffers engage in all the steps of closure implementation and ensure that stakeholder engagement occurs strategically throughout the process of planning for the mine closure and into the post – mining land – use relinquishment phase.
Decommissioning and Closure Plan
Decommissioning and closure involve the implementation of the closure plans developed in the earlier stages. In this phase it may be necessary to conduct investigations and studies to identify potential contamination and to confirm that the agreed outcomes and criteria have been met.
At this time of mine closure, most of the preparatory work needed to protect the environment has been done as part of the well – conceived closure plan which has been progressively updated and implemented throughout the operations phase.
Mine can close unexpectedly during the operation phase for many reasons, such as process failure, unforeseen ore limitations, a collapse in commodity value, budget overruns, community opposition and outrage, war or conflict, significant unexpected environmental impacts, or perhaps a combination of such factors (Force Majeure). A case study example, LAMCO, BMC. etc
It can take considerable persistence by a company to achieve relinquishment, particularly if early rehabilitation is adequate for the task. The quality of the mine closure planning will become apparent once the last tone of ore is passed through the processing plant and it is shut down. At that stage, the key people on site will be the closure manager and the closure team.
Activities (which can run for some years) in this phase include:
- Demolition and removal of infrastructure
- Consolidation and decommissioning of the tailing’s facilities
- Reshaping of remaining mining landforms
- Re – establishment of surface hydrology and drainage systems
- Treatment of discharge or disposal of quality water
- Completing the rehabilitation and remediation processes
- Managing monitoring, recording, and documenting closure processes
- Measuring the performance of closure activities against agreed closure objectives and criteria and reporting that performance
- Inspections, consultation and reporting to stakeholders on progress
- Staged and progressive community and government sign – off.
A systematic process of data recording and management during decommissioning and closure is vital for the closure planning team in understanding the status of the closure work and issues.
Post – closure management and monitoring
Even after bulk of the mine infrastructure has been demolished and removed and the site has been fully rehabilitated, there is a requirement for ongoing management and monitoring of the site. This phase continues until final sign – off and relinquishment are achieved and the land users take ownership and responsibility.
Considering needs to be given to how to resource this phase of the closure process, as there are many tasks to consider, such as logistics, personnel, safety, and responses to change. Retaining company staff or caretakers to attend to post – closure management may require the retention of offices, amenities and equipment but can be cost – effective, rather than looking to others external to the site who may lack site knowledge and have large mobilization costs.
Company responsible for some closed sites may have to retain a medium – to long – term presence on site due to requirements, particularly, those related to long – term water treatment.
Other activities at this stage may include:
- Ensuring that the site is as safe as possible, given that the mine area becomes gradually more inactive
- Appropriate or new safety protocols for site access and the installation of adequate security to limit access and prevent vandalism.
- Review of any failed decommissioning or rehabilitation activities
- Continued monitoring and reporting on rehabilitation and closure target against the agreed closure objectives and closure criteria
- Provision of monitoring and other information to the regulator and stakeholders as part of the agreed and appropriate format to obtain sign – off (this may be via progressive community and government sign – off on long – lead closure criteria targets)
- Relinquishment of mining leases and legal transfer of ongoing responsibility to post – closure stakeholders and land users.
Closure Plan (Decommissioning, Sierra Leone Approach)
Tonguma Exploration Project ESIA Volume 2, 7.1
Once it is determined that no further mining operations are feasible, buildings, equipment and materials would be removed, sold for scrap or demolished and buried on site after removal of all industrial wastes. No industrial wastes would be left on the site. Any contaminated soil on site at decommissioning would either remediated on site or containerized and shipped off site as hazardous waste. Concrete foundation would be broken to below ground level, the footings buried and the waste material landfilled on site. From preliminary exploration results, it is likely that mining will continue but however, all is depending on the final exploration results.
7.2. Reclamation and Closure Plan Approach – Republic of Sierra Leone
This plan details actions to be taken to ensure the site is chemically and physical stable in the event that the exploration phase ends in closure of operations. It aims to ensure that the land is returned, to the extend feasible to an appropriate end land use as determined through the ESIA.
Progressive reclamation is being implemented, where possible, where facilities are disturbed areas are no longer active in order to minimize the project foot print. E.g., ongoing progressive reclamation effort by the company, through the revegetation of former waste dump site.
The objective of the reclamation and closure program is to convert the concession area to an income generating region. Following cessation of operations, disturbed areas will be stabilized and reclaimed to a number of alternative land and marine uses that will provide income opportunities for local communities.
An inventory of all the areas facility will be carried out to identify which will need to be addressed for closure. The following areas are expected to be included: Mine pits, Mine ponds, Process facilities, Waste management facilities, Exploration, access and haul roads, topsoil stockpiles, etc.
Mineral legislation and regulatory framework
The Ministry of Mines and Energy is the Government Agency responsible for the administration of mineral and mining sector, including granting mining licenses, and it has statutory oversight of the energy, mineral and water sectors. The minerals and mining sector is regulated by the mining law of 2000 and Exploration Regulations. The mineral policy of Liberia was created in March 2010 to complement the mining and mineral law. The documents outline the government’s expectations with regard to the contributions of all the stakeholders in the sustainable development of Liberia’s mineral resources.
In addition to the mining license, there is a Mineral Development Agreement (MDA), which sets out the basis to acquire a class A mining license. The MDA sets out in detail operational and fiscal terms for both exploration and mining and to ensure a straight forward transition from exploration to mining phase of the operation provided that the operator has complied with the general provision of the law.
In negotiating and MDA, the mineral technical committee has discretionary authority regarding those matters which are subject to the regulations, which together with the law specify principal terms and conditions.
Currently, Liberia has signed Mineral Development with two major mining companies in the world that include Mittal Steel Holdings, N.V established August 17, 2005 and China Union Investment – Liberia also established January 19, 2009 respectively.
This article specifically focus on the assessment of clause that deals with decommissioning in various MDAs where, the paper find out there were no clear post – closure management of mine site upon termination or end of life of mine during the concession period. Moreover, during the assessment, this article find clauses that deals with disposition of assets, immovable and movable asset upon the termination of the concession.
For Mittal Steel Holding, N.V, you have Article xxx – disposition of assets that include:
Section 1 – Immovable Assets; section 2 – Movable Assets; and section 3 – Removal of movable Assets
And similarly for China Union Investment, Liberia, section 25 also focus on disposition of assets
Section 25.2 – Termination by the government or expiration of the term and section 25.6 – disposition of mining plant and infrastructure on termination by the concessionaires. However, the assessment was curious to identify clause in MDAs that will transforms those mine site into economic viable area for income generating purposes by creating a trust fund the first year operation of the mine in order to carry on infrastructure development that will create sustainable employment opportunities and livelihood for local communities and its people.
1972 Executive Law Chapter 33
The Department of Mineral Exploration and Environmental Research (D’MER) was established in accordance with the 1972 Executive Law Chapter 33. The department has the responsibility to provide guidance for geotechnical investigations of engineered landfill sites, oversees the development and management of natural resources and sanitation sector and to conduct scientific and technical investigations required for environmental assessments. The Department is also responsible for granting research licenses. Is this law been inforce, when the old mine site of Bong mine in Bong County and Bomi Hills that created a mine pone known as the Blue lake are lying with deep open pit in Bong mine without being fill since that concession came to a halt?
According to Chapter 7 of the Revenue Code of Liberia as Amended 2011,
Section 702 (a), the rate of tax on taxable Income from a mining project shall be 30 percent.
Section 703 (a)
General rule: Minerals extracted by a mining project are valued for all purposes at market value f.o.b. Liberia without reduction for claims, counter claims, discounts, commissions, or any other asserted offset or deductions.
Section 704 (a) Royalties
A royalty is due and payable to the government of Liberia at the time of each shipment and in the amount of the stated of percent of the value of commercially shipped mineral regardless of whether the shipment is a sale or other deposition:
(a) Iron Ore 4.5 percent ( B) Gold and other base metals 3 percent ( c ) Commercial Diamond 5 percent
(b) Surface rent: A producer who has a mineral exploration license or a Class A Mining license shall pay an annual surface rent:
(A) Land within a mineral exploration License area, US $ 0.20 per acre
(B) Land within a mining license area: (I) year 1 – 10, US $ 5.00 per acre, (ii) year 11 – 25 US$ 10.00 per acre
Section 710: Special rule for decommissioning expenses
(a) Qualification: A mining project payment for decommissioning expenses is deductible from gross income under section 705 (b) only in the amount during the tax period.
( 1 ) To defray reclamation or decommissioning expenses upon cessation of commercial production remedying damaged caused to land used by the project or environmental damage, the project may have caused ( including damage that extends beyond the mining license area), but not if drawn from a trust fund described in ( paragraph) (2) , or
(2) To approve trust fund established to defray future expenses of the type specified in paragraph (1) subject to limitations or requirement specified in regulations.
These are good tax laws that given the mining sector, this assessment is curious to note what percentage of the amount generated from those concession agreement are place in a trust fund the implementation of post closure management plan of those mine site
Regulatory Framework
The principal agency for the management of the environment in Liberia Is the Environmental Protection Agency (EPA). The Environmental Protection Agency Act of Liberia (EPA 2003) mandates the EPA to coordinate, monitor, and supervise all activities in the field of the environment. The EPA makes mandatory to file an environmental Impacts Assessment (EIA) and Environmental Impacts Statement (EIS) to obtain government approval prior initiating activities. In case of mining sector, an EIA declaration format has been specifically designed for mining activities. The EIA has five component phases: Project screening; Scoping, description of the project/ action; alternatives, and environmental baseline, identification of environmental impacts; environmental management plan/design of corrective measures; and monitoring and control.
Liberia Extractive Industries Transparency Initiative (LEITI)
The Republic of Liberia was admitted as an EITI candidate country in 2008 and was the first African country to become EITI compliant in 2009. The EITI ACT of 2009 requires that all extractive companies and covered Government’s ministries and agencies disclose, at once every year, the data of all payments made and revenue received in respect of the extraction of Liberia forest and mineral resources. This initiative is in support of the government’s effort to promote transparency and accountability over the management of revenues from Liberia’s extractive resources, ensuring that all citizens benefit from each such resources. The republic of Liberia has been temporarily suspended from the EITI since September 2018 due to reporting delays and stalled MSG process. In March 2019, the Board mandated the secretariat to undertake a review of adherence to requirements 1.1& 1.5 and found that limited progress had been made in meeting the requirements by 31 December 2019 to avoid delisting. The EITI Board reviewed progress made and agreed that the EITI process in Liberia been credibly revived. The Board agreed to lift Liberia’s temporarily suspension effective 6 March 2020. The decision is due to improvement in implementation related to multi – stakeholder group (MSG) oversight (requirement 1) and the publication of outstanding EITI. The 2019 Standard introduced new aspects on environmental, social, and gender impacts, it also breaks ground the disclosure of the identity of the real owners – the beneficial owners’ – of the companies that have obtained rights to extract oil, gas, and minerals starting from 2020. The LEITI process covers four sectors in Liberia: Mining, oil & gas, forestry, and agriculture. To date eleven (11) annual report EITI reports have been published covering the period from 1 July 2007, until 30 June, 2018.Interestringly, and this article focus on the mining sector in Liberia. The mining industry contributed extractive revenues during the fiscal year 2018 – 2019 US $ 42, 596,473 consist of 53.49%of the total revenue from the extractive sector according to LEITI. Mining of mineral resources such as Iron ore, Gold, Diamond etc., has had serious environmental impact and the need for reclamation of those old mine site for industrial purposes and create employment opportunities for local communities can’t be overemphasized.
Infrastructural development in old and abandoned mine site. Finland as a case study.
In Finland, old mine site was developed into commercial and recreational activities that comprised of total 35% of the post mining site. These mines were commonly located in densely populated areas or next to the village. Eight sites were classified as cultural sites of national significance in the inventory by National Board of Antiquities. A majority of these had been in operation over several decades. Museums presenting gold, and copper mining history were also established in two mine sites in Finland. A mining theme holiday village was in two post – mining areas and a restaurant in three sites (gold, copper, iron). Various cultural events were arranged in an old copper mining area and concerts in a closed open – pit molybdenum mine.
Moreover, a motorsport venue had been constructed in the tailings area of an old copper mine. Other recreational activities particularly in the tailings area of closed mines (copper, iron, zinc, and nickel) included e.g., bird watching, a golf and disc golf courses, greyhound racing and a shooting range. Tailings were also used for rally and dirt – bike tracks. Interestingly, at least nine water – filled open pits and one mining island (copper, gold, iron, molybdenum, nickel, and zinc) were popular dive sites and one lake area in the vicinity of a closed mine was a swimming place and revenue are raise from tourists and citizens for those developed mined site in Finland.
Industry and Infrastructure
Gainfully, nearly one third of the closed mining areas contained new activities related to industry and infrastructure. A majority of these sites were big or middle – sized and located in the vicinity of densely populated areas or villages. Those old mine sites were developed into new industries included a bus scrapyard, railway and vehicle manufacturing. Sawmill and engineering works and a concrete element factory in the closed nickel, iron, and copper mines. Old buildings were also utilized as warehouse and offices and even for a short time Mushroom cultivation. Closed iron mining sites included a waste facility of a potato processing factory and a waste water treatment plant. Additionally, a mining tower used to serve as a lighthouse in an old iron ore mining island and airport for light aircraft was previously located in the tailings area of zinc mine. A concentration plant continued to operate in four sites in modern Finland.
According CTGN May 16, 2021 publication
The newly – refurbished Huangshi National Mine Park, located in Huangshi City of Cental China’s Hubie province, used to be a century old mine, known as Daye Iron ore Mine. Now it has been transformed into a cultural industrial park, a national AAAAA – level scenic spot, creating a path green development with booming industrial tourism.
The mine site, China’s first large -scale open pit iron ore mine, has a mining history of 1,784 years, in which it created economic benefits as well as ecological ills. The Daye Iron Mine used to be Asia
‘s biggest opencast mine. The mouth of its pit area is as large as 150 standard football pitches, stretching over 1.08 million square meters with a depth of 444 meters.
Environmental risk of old Mine sites
Like in China, thousands of residents shanxi province have been evacuated as villages next to mines have started sinking, after decades of reckless coal mining. Moreover, the Shanxi province in Northern China plans to move 655,000 residents by the end of next year from unsafe old mining regions.
Similar risks also exist in the mining sector in Liberia, where abandoned old mine sites that had not gone through reclamation or redevelopment that pose serious threat and high risks to local communities in those regions. Some of those old mine sites include, Bong Mining Company (BMC) in Bong and Margibi County respectively, LAMCO in Nimba county, Putu Iron ore and Bomi Hills in Bomi county.
Conclusion
Post – mining sites in Liberia contain a wide variety of physical and human environments risks. Significant mines located near population centers seemed to support the greatest diversity of post -mining activities related culture, recreation, industries, and infrastructure, whereas new functions in small and/ or isolated sites were generally limited. Sustainable re-use of post – mining areas requires efficient evaluation of land use potentials and limitations and the overall suitability of the sites for local land use needs. Increasing sizes of new mining projects calls for paying more attention on the characteristics and functions of the future post-mining landscapes to avoid negative land use development leading to degraded and underused areas from environmental, economic, and social perspectives. The article is revealing, if the old mine sites are transform into industrial and infrastructural development by national government or other stakeholders that have interest in investing into old mine site for recreation and industrial purposes will alleviate unemployment in those region, create economic growth and improve livelihood in local communities.
Findings
- This article has identified there are no infrastructural or industrial development in any of the old mine site for income generating purpose in Liberia
- There are no provision for post closure management plan and no amount stated that should be contributed into a trust fund for redevelopment of abandoned mine site in Liberia
- All of the old or abandoned mine site in Liberia posed serious and dangerous environmental threats, especially those deep open pits left without been filled.
Recommendations
In order to ensure that the old mine sites in Liberia are develop to create livelihood, economic growth and minimized environmental risks, the following steps should be taking into consideration:
- A robust and verifiable process should be in place to monitor and demonstrate complete criteria. By doing so, the national government should establish mine closure management committee through Mine & Energy Ministry, National Bureau of Concession, National Investment Commission, Environmental Protection Agency, the Ministry of Finance and Development Planning and the Good Governance Commission to ensure the implementation of every stages of the decommissioning in accordance with MDA of every Mining Company operating Liberia and create all old mine and current mining site inventory.
- National Government should also benchmark our regional counterpart decommissioning and post-closure management plan clause so that the reclamation and closure project convert the concession area to income generating and are closest to its natural use that will provide opportunities, livelihood, and environmental safety for local communities.
- The National Legislature should ensure tax components in all MDAs doesn’t take precedence over the Liberia Revenue Code 2000 as amended 2011 as there exist provisions in the LRC that provide tax incentives or tax break (section 16 of the LRC and chapter 7) that applied various tax rates in the mining sector. This will enhance and allow government raise more revenue to target approximately a billion dollar budget in USD.
- National government should prioritize building capacity of various professional and technical skills with specializations to create experts that will immediate mining negotiations in the interest of Liberia so as to overcome the challenge of asymmetric information, where the investors are aware of the quality, quantities and value of mineral resources and we are not. Like Ghana did when they discovered oil blocks, the Ghanaian government prioritize building technical capacity in the field of petroleum engineering to enable Ghanaians dominates the oil industries in every aspect.
- According to 710 (a) (2) of Liberia Revenue Code, National government should established a trust fund to defray future expenses in the mining industry.
- National government should emulate Finland and china to transform and build infrastructures of different kinds in old mine sites in Liberia that will include but not limited to the following; Manufacturing industries, tourism sites, cultural preservation, military training field, processing plants, museum and recreation activities etc, that will generate revenue and create employment opportunities for local communities.
About the author
Yusuf S. Sherif is a visionary professional with interest in policy research and advocacy, a volunteer, and an entrepreneur coupled with experience in auditing, project management along with over five years’ experience as a Policy Analyst Natural resources Tax at the Direct Tax Unit, Revenue and Tax Policy Division, Department of Fiscal Affairs, Ministry of Finance and Development Planning.
He holds a Bachelor’s Degree in Accounting from the University of Liberia, couple with several professional training certificates, local and international that include but not limited to the following; Certificate in Public Policy Analysis, Liberia Institute of Public Administration (LIPA),courtesy of Ministry of Finance and Developing Planning
Certificate in Macroeconomic Management in Resource – Rich Countries and Public Financial Management, from IMF’S Institute for Capacity Building, Washington DC, and International Certificate in Receipt and Compliance Audit from International Centre for Information System and Audit (iCISA), Noida City, India
Contacts: +231775806758 / +231880678730
Email: mys3445@gamil.com
References:
Mine Closure; Leading Practice Sustainable Development Program for the Mining Industry, Sept, 2016
Mine Rehabilitation; Australian Government, September 2016
The mining sector of Liberia: current practices and environment challenges. Samuel T.K. Wilson, Hongtao Wang, Martin Kabenge, Xuejiao Qi
Environmental and Social Impact Assessment (ESIA) of the Tonguma Exploration Project, Kenema District, CEMMATS Group LTD, Republic of Sierra Leone
Ministry of Mine & Energy (Mining Law of 2000)
Environmental Protection Agency, Liberia
The Revenue Code of Liberia 2000 as amended 2011 (LRC)
China Union Investment – Liberia, January 19, 2009
Mittal Steel Holdings, N.V, August 17, 2005
Liberia Extractive Industries Transparency Initiative (LEITI)
