'Atmosphere Of Secrecy' Shrouds Liberia Govt Pact

'Atmosphere Of Secrecy' Shrouds Liberian Government's Mineral Pact – UN Panel

A United Nations panel appointed to investigate the observance of sanctions against Liberia diamond exports says the Government of the West African country has forged "an exclusive mineral purchase and cooperative development agreement with an international company of unknown provenance and with no mining sector experience in an atmosphere of secrecy."

The Security Council today discussed the report of the Panel of Experts, which also says that with the slow rate of funding and technical assistance coming in the country cannot successfully apply to be part of the Kimberley Process that certifies rough diamonds as legal for international sale. Absent that success, Liberia's Security Council-imposed diamond sanctions remain in place.

The Ministry of Lands, Mines and Energy has trained many personnel, including 65 agents to enforce mining laws and 46 mineral inspectors to enforce the broad Kimberley Process, but it lacked the money to hire and deploy them, it says.

Meanwhile, according to a number of sources, "the National Transitional Government of Liberia (NTGL) has signed a secret agreement with the West Africa Mining Corporation (WAMCO), a company financed by the privately owned London International Bank Limited," the five-member Panel says.

The Panel has received an "unsigned copy" of the 10-year agreement giving WAMCO the exclusive right to purchase all minerals produced by mining cooperatives it will establish and support in all of western Liberia, except those already subject to established mineral development agreements. WAMCO also had the option to renew the contract.

"Such an arrangement would create a de facto monopoly over much of Liberia's diamond-producing regions and would preclude market competition for the purchase of diamonds by dealers from alluvial artisanal miners," it adds.

There was no formal or open bidding process and no consultation with the Liberian Monopolies and Contracts Commission over the negotiations with WAMCO, it says, and it discovered in an interview of WAMCO representatives in Liberia's capital, Monrovia, that WAMCO has had no experience in mining.

"The people of Liberia are not likely to benefit from such an arrangement in the long term," it says.

Another company, American Mining Associates (AMA), held an exploration licence but had never filed the requisite exploration plan, the Panel says.

Although the Panel, along with members of the Kimberley Process export mission and representatives of the Ministry of Lands, Mines and Energy, saw "significant activity" at the AMA site, the company said it was "producing no more than two stones per month."

Last month the Ministry ordered AMA to stop operating and explain its activities formally, the Panel says.

Poor security in diamond-producing regions, meanwhile, is contributing to illegal mining, it says.

Foreign buyers have been operating out of hotels and guest houses, buying diamonds and smuggling them "to neighbouring States where goods may be passed off as the domestic production of those countries and obtain Kimberley Process Certificates" for international trading, it says.

The NTGL sent circulars to hotel owners requesting information on illegal activity, but "so far no arrests have been made and it can be assumed that such illegal trade in violation of the United Nations embargo persists," the Panel says.

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