MAC: Mines and Communities

Liberia: The gold mine that brought only misery

Published by MAC on 2017-04-06
Source: 100Reporters, IRIN, Le Monde Afrique (2017-04-05)

The World Bank is a key shareholder in the multi-million-dollar project

The New Liberty Gold Mine is located in Grand Cape Mount County, in the north-western portion of the Republic of Liberia, approximately 100km north-west of the capital, Monrovia.

Construction commenced in April 2014 and first gold was poured on 31 May 2015. Avesoro Resources Inc. (formally Aureus Mining Inc.) was incorporated and registered in Canada on February 2011. 

See also on MAC:

2016-06-11 Liberia: Politicians and UK mining company charged with corruption

2014-07-07 Liberia police violently disperse ArcelorMittal mine protest

How a gold mine has brought only misery in Liberia

Hundreds of families were forced to make way for the construction of the New Liberty Gold mine, Liberia’s first and largest commercial gold development, but the promised resettlement package remains largely undelivered

https://www.irinnews.org/investigations/2017/03/21/how-gold-mine-has-brought-only-misery-liberia

21 March 2017

Siah lives in Kinjor, a small town in the lush forests of western Liberia. Just a few steps from her home, Liberia’s largest commercial gold mine, New Liberty Gold, plans to dig out a billion dollars-worth of the precious metal.

The Liberian government and its multilateral funding partners see commercial mining as a path to development in a country still recovering from the impact of 11 years of civil war.

Under the law, communities are obliged to give up their land rights and move, in return for compensation. But a months-long investigation by IRIN, Le Monde Afrique, and 100Reporters reveals that financial reward isn’t always forthcoming from the foreign mining operations.

To make way for New Liberty Gold, 325 families in two villages, Kinjor and Larjor, had to abandon their homes, farms, and artisanal mines that had provided some income. In return for their move to a new village, also named Kinjor, and carved out of the forest near the mine, the company promised to make life better: new houses, a school, hand pumps – and what could have made all the difference to Joseph – a clinic. 

Construction began on the mine in 2014, and the first gold sales came a year later. Even though the company describes the operation as a “key asset”, the promised better amenities are yet to materialise years later, and there has already been one major chemical spill that has polluted the environment.

New Liberty Gold has the backing of the World Bank’s International Finance Corporation, which since 2014 invested $19 million and became a key shareholder. That support was predicated on a 155-page Resettlement Action Plan by the company, which listed its planned $3.9 million investments in the new Kinjor.

During the IFC board meeting that approved the mining project, the US delegate formally raised “serious concerns” regarding “the environmental and social risks posed”. The US urged the IFC “to work with the company to ensure that all appropriate funds are set aside for this [resettlement] plan”.

A history of displacement

But the Bank and the IFC do not appear to have held New Liberty Gold accountable for failing to meet its basic obligations, despite a commitment made by the IFC on its website to help the company “implement best practice standards” in Kinjor.

“I’m really disappointed to say that [this case] is one amongst many," said Jessica Evans, a senior researcher at Human Rights Watch. "We’ve seen time after time serious failings by the World Bank and the IFC when it comes to resettlement."

That is little comfort for Siah. Outside a neighbour’s house in Kinjor, she fought back the tears to speak about her son’s death. Her voice rose in anger when she listed the failings of New Liberty Gold: “no hospital here, no safe drinking water”.

“There are toilets right next to the water pump. It makes us sick,” she added. “We are suffering.”

The owner of the mine, Avesoro Resources (previously called Aureus Mining), has built a school and installed some water pumps. But the rest of the action plan, the compensation due for uprooting people against their will, remains little more than a wish list.

Still waiting

In one of Kinjor’s narrow alleys flanked by mud huts, Yarpawolo Gblan, an old man in a faded black polo shirt, stepped forward: “Are you a journalist? Come and see my house!”

We sat on a bench, our backs to the wooden wall of a hut scrawled with the phone numbers of Gblan’s children. Three years ago, Avesoro had forced him to move from what had been his home for a decade, into “temporary” accommodation, to make way for the mining project.

The huts the company provided have just two small rooms: not nearly big enough to house Gblan’s family of eight. He extended the original structure as best he could, using his own resources.

The huts were meant to be a stopgap measure, until the displaced families could move into 325 “improved houses” promised by the company. The unfinished shells of those houses stand in ordered rows, just a few hundred metres away.

But construction stopped longer than a year ago. Weeds now grow between the brick walls, and slimy bright-green algae thrive in puddles fed by rain falling through where roofs should be.

The company man

Debar Allen is the company’s general manager, a physically imposing man who fills his generously appointed office. From behind a large wooden desk, he explained in a calm baritone that people like Gblan, who were supposed to have been resettled, “do not want to move from where they are”.

He offered two reasons for the construction delay: the need “to get going with the mining project because we were running out of funds”, and the desire of those being resettled to build their own permanent houses where they are now. “Rather than bringing contractors from Monrovia, we have to team up with them,” he said.

The World Bank, via email, offered a different explanation. With “the Ebola outbreak, the company faced significant construction delays. As a consequence, the project experienced some significant challenges that impacted its financial/cash flow position.”

The result was that “the full implementation of several aspects of the project had to be postponed, and some of the permanent houses have not yet been completed.”

But in February 2015, the IFC provided a $5.3 million cash injection for New Liberty Gold to help the company “cope with additional costs” as a result of the Ebola outbreak, and to “support the company’s ongoing work in Liberia”. 

In reality, the company should have finished the resettlement houses several months before Ebola hit Liberia. Moreover, the outbreak was brought under control more than 18 months ago, yet the new housing construction will not be completed any time soon.

Allen explained: “We signed with the [local] leaders a memorandum of understanding that postpones the completion to the end of next year”. That means December 2017.

Community representatives told IRIN that the company had asked them to sign numerous times, accepting the new deadline, and that they eventually gave in. They had reasoned that whether they signed or not, the houses would not be built any faster.

The World Bank did not reply to IRIN’s requests for more details on the resettlement timeline and the mine’s failure to make good on its promises to the community.

Dead fish and rashes

A slim teenager lifted his t-shirt to show a rash he has had since shortly after the spill. He told IRIN it still itched but said: “it doesn’t worry me all the time”. Several mothers confirmed their children were still afflicted by similar rashes. No medical tests have been conducted on villagers who’ve reported similar effects.

Avesoro’s Allen said the company found out about the leak in April, after a phone call from the local chief in Jikando. He noted that the company now regularly delivers frozen fish to replace the poisoned ones, as the community’s “source of protein was from the creek”.

On 14 April, shortly after the leak, the Liberian Environmental Protection Agency fined the company. On 10 May, Avesoro publicly disclosed the spill to shareholders, stating that its “investigations to date indicate no adverse impact on any human settlement”. 

It’s difficult to pin responsibility for the mine’s failures on any individual because it’s hard to identify the successive true owners of New Liberty Gold. Aureus is part of a long list of shell companies named in the Panama Papers leak, many of them registered in opaque jurisdictions. 

The latest twist in the ownership trail came at the end of 2016 when MNG Gold, headquartered in Turkey, took over Aureus and changed its name to Avesoro Resources Inc.

The warlord

But the roots of the New Liberty Gold project stretch back before 1995, when a resource extraction license was issued by former warlord turned president Charles Taylor to a mysterious company called KAFCO. 

The permit changed hands a few times and, today, Avesoro holds its permit via a wholly-owned subsidiary, Bea Mountain Mining Corp – a company created in 1996 by Keikurah B. Kpoto, one of Taylor’s closest associates.  

The exploitation of Liberia’s gold and diamonds allowed Taylor, convicted of war crimes and crimes against humanity by the International Criminal Court in 2012 and now serving a 50-year prison sentence in the UK, to fund his war effort.

In 1998, foreign interests bought Bea Mountain Mining. The beneficiaries of the sale were well hidden. According to a document IRIN procured, three quarters of its capital belonged to a company incorporated in the British Virgin Islands. The rest was held by owners of bearer shares.  

Bearer shares are the vehicles of choice for the corrupt because they are owned by whoever holds the paper certificates, just like cash. There is no trace of their owner in company records and they can easily become covert payments for pretty much anything.

The World Bank nevertheless wrote that it had undertaken due diligence on New Liberty Gold, an investigation that included “desktop reviews, several meetings with Aureus management and a site visit”. 

Over the past decade, the IFC has spent more than $200 million on projects like New Liberty Gold. It has a seemingly unshakable faith that commercial mining can deliver development that will trickle down to communities like Kinjor.

As for Siah: Her last-born is now buried. If she once believed the promises of New Liberty Gold, that is certainly no longer the case. “The company is doing nothing for us,” she told IRIN. “If the company had built a hospital here, [his death] would not have happened.”

(This investigative report is being jointly published by 100Reporters, IRIN and Le Monde Afrique. 100Reporters is an award-winning investigative news organisation based in Washington, DC. Its objective is to reveal untold stories on corruption, transparency and accountability. IRIN delivers unique, authoritative and independent reporting from the front lines of crises to inspire and produce a more effective humanitarian response. Le Monde Afrique is a pan-African francophone media for news, reporting, analysis and debates.)

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