Arcelor Mittal to Start Operations in New Mine in Liberia – Re-employs Redundant Workers
Buchanan, Grand Bassa County – Arcelor Mittal Liberia (AML) is expected to re-employ at least 200 workers it redundant in the past two years due to unfavorable global economic factors that affected the price of iron ore on the world market.
Report by Alpha Daffae Senkpeni /[email protected]
In June 2015, 250 workers were redundant, while 142 jobs were also sliced in 2016 leaving many frustrated about the prospects of the world’s leading iron producer presence in Liberia.
The slicing of social development funds for Grand Bassa, Nimba and Bong Counties by the company also remained a contentious issue; observers described as a ‘gloomy’ future for the company’s investment in Liberia.
When the company opted to sliced jobs the workers’ union showed stiffed resistance prompting a deal which specified that redundant workers would be rehired once the production and market condition improved.
“The promising future for those that were redundant and those that intent to comeback, because the union did not just agree with management to redundant those workers,” explained Michael Tobloun, Secretary General of the AML worker union.
“We agreed that if things subside [improved], if the financial situation improves, if the price of iron ore will appreciate, some of those redundant will be rehired.”
There are various prices of iron ore on the world market, but there are reports of significant raise in the price as Market Index on January 3, 2017 reported that the price is US$74.37 per ton. This is a significant improvement in the price considering that the price slumped to as low as US$37.50 per ton.
Additionally, sources say the move to re-employ the redundant workers comes from a decision by the company to start mining another mountain within the Mount Nimba range.
Our source says the current mine the company operates is producing low grade iron ore which is putting cost constraint on its operations.
But with the new mine, production is expected to increase which will also require the hiring of additional work force.
FrontPageAfrica made efforts to verify the report, and contacted the company’s Public Relations Manager, Hester Pearson Baker but there were no response.
Despite the prospect the sector is showing following the improved in price, industry experts fear that the price might fluctuate and this uncertainty has prompted the workers union to relax some of its demands.
“We will look at the average price although iron ore price has increased,” Tobloun said.
Already, Mittal is producing 90 tons per month which is 250 tons per quarter – this is a significant drop in the 750 tons the company earlier produced quarterly.
A company insider who prefers anonymity told FrontPage Africa although prices have improved, production is still low and this continues to hamper the company’s operations in Liberia.
“Prices are appreciating but production has reduced because the mine does not have the value of iron ore we need,” the source said.
However, the workers union is confident that opening of the new mine which reportedly has high grade ore would influence the rehiring of these workers. Operations on the new mine is expected July this year, our source confirmed.
“We’ve been negotiating with management, if you need people to work on the mine – whether temporary or permanent workers – you will first of all call those redundant workers before you can call any other worker,” the union secretary general said.
Toublon said many redundant AML workers were unsure about the implementation of the agreement when it was signed, but they are now hopeful considering the latest unfolding.
“From the beginning they taught it was a rhetoric the union was saying, but now they are seeing the reality,” he added.
Arcelor Mittal and the Liberian government signed the first Mineral Development Agreement (MDA) in 2005 and amended it in 2006, making many Liberians optimistic about the country’s investment potential after years of economic deprivation.
The MDA was expected to enhance development and economic, social and environmental investments with an objective of ensuring Liberians benefit from the extraction of their natural resources.
The MDA specified that the steel giant is to pay US$73 million to three counties: Nimba, Bong and Grand Bassa as well as cater to other corporate social responsibilities.
But the company has also fall short of paying the social development funds to the three counties.
It is now 10 years since the MDA was signed and the company has over the last couple of years struggle, showing serious decline in its potential although the company forecast in 2006 that by 2012 it would have shipped four million tons of iron ore each year and increase the world’s iron ore production to 100 million ton by this 2015.
It is unclear whether the mining of a new mountain will improve the company operations and bring back the jobs and development it promised Liberians.