MONROVIA – ArcelorMittal Liberia has threatened to halt phase two of its investment in Liberia on suspicion that its concession area at the Port of Buchanan is being encroached on with the ‘endorsement’ of the Government of Liberia through a deal with Prista Port.
Prista Oil Holding is the mother company of Prista Port Buchanan LLC. It is a Liberian business entity, which was established by the European multinational company Prista Oil Holding EAD, in order to facilitate the recently concluded Concession Agreement with the Government of Liberia for the Port of Buchanan.
By virtue of the Concession Agreement dated 14th August 2019, approved by President Weah on September 12, 2019, and ratified by the Senate with Act No41 on September 30, 2019, Prista is expected to manage the Port of Buchanan for 25 years. They are set to invest a whopping US$277 million in the Liberian economy.
ArcelorMittal’s Claim
In a letter to the Minister of State, Nathaniel McGill, the Chief Executive Officer of ArcelorMittal Liberia Scott Lowe expressed the company’s “objection to a concession agreement entered into by the National Port of Authority (representing the Government of Liberia) and Prista Port Buchanan LLC on grounds that it includes and overlaps a majority of the current concession area of ArcelorMittal Liberia in Buchanan, Grand Bassa County”.
The letter added: We have been advised that some initial agreement has been executed. Of critical importance is that it awards the iron ore port and most of the associated facilities currently held by ArcelorMittal Liberia to Prista Port.
This action undermines and creates uncertainty regarding the security of tenure of ArcelorMittal Liberia’s business and future investment. Recently, representatives of the Prista Port approached ArcelorMittal in London and asserted that their concession would come into effect and that their company would eventually replace ArcelorMittal Liberia (AML) as the concessionaire. We reject this assertion by Prista Port and maintain that no valid concession can ever be granted that overlaps AML’s concession area.
The importance of this matter is such that ArcelorMittal Liberia cannot proceed with the Phase 2 investment proposal that is currently underway unless and until this situation is corrected. The Company requires absolute certainty that its concessions and permits are in good standing as an essential component of its business case for investment and cannot consider an investment where security of tenure is in dispute or at risk.
The iron ore company requested the government of Liberia to confirm that it has not ratified and would not ratify Prista Port concession agreement. ArcelorMittal also insist that it will not grant any concession that overlaps or in any way reduces AML’s concession area while it remains valid.
Mittal Phase II Project
ArcelorMittal Phase 2 project involves the mining of high-grade iron ore at Mounts Gangra and Yuelliton. Both mountains are still green field sites as far as mining activity is concerned.
The main benefits from the project accrue to the Republic of Liberia as a whole. National benefits. The Government of Liberia expects mining to support the Liberia Rising 2030 plan, and the Nimba Western Range Iron Ore Project is the flagship for the sector. The current Phase 1 DSO Project was the largest contributor to Liberia’s GDP growth of 9 percent in 2012.
The Phase 2 contribution was estimated by the International Monetary Fund to be a clear $ 2.4 billion to the Government of Liberia in royalties, taxes and other direct payments. In addition, since the Government is a 30% shareholder, it will receive an equivalent proportion of profits. Beyond the huge capital investment in the project, most of the operational expenditure for the life of the mine will accrue in-country. Beyond this, the project will generate direct employment, skills development and infrastructure benefits to the operational areas.
“The importance of this matter is such that ArcelorMittal Liberia cannot proceed with the Phase 2 investment proposal that is currently underway unless and until this situation is corrected. The Company requires absolute certainty that its concessions and permits are in good standing as an essential component of its business case for investment and cannot consider an investment where security of tenure is in dispute or at risk.”
– ArcelorMittal Communication to Liberia’s Minister of State for Presidential Affairs, Nathaniel McGill
Prista Agreement Recalled
Meanwhile, the Liberian Senate has recalled the agreement with Prista Port Buchanan LL. The Senate decision was based on the complaint filed by ArcelorMittal.
Montserrado County Senator Darius Dillon moved the Senate for the recall of the agreement from the House for more scrutiny based on the complaint.
A motion for reconsideration by Senator Saah Joseph was rejected by the floor.
Prista Agreement
It can be recalled that the wife of former British Prime Minister Tony Blair, Mrs. Cherie Blair, who represents the legal interests of Prista Port, wrote President George Weah seeking his intervention due to an “apparent stasis in the House of Representatives.”
In Mrs. Blair’s letter, a copy which of is in FrontPageAfrica’s possession, she told President Weah that she has been instructed by her client in connection with their investment in the Port of Buchanan.
“As you will be aware, Prista has the concession to deliver a visionary transformation of the port and the surrounding area to create an exclusive economic zone of strategic national importance (“Port of Buchanan”). At least to me, it appears that Prista’s project is destined to play a vital role contributing to your legacy while driving Liberia’s economic growth and having a profound social impact.
“However, despite Prista’s legitimate expectations that everything was in order with the concession after over one year of negotiations, planning and agreements, the project has suddenly stalled due to apparent stasis in the House of Representatives. Prista is concerned by this inexplicable and seemingly arbitrary obstruction and invites your intervention to make sure matters progress in accordance with due process at the forthcoming extraordinary session of the House on 10 December 2019,” she stated in her letter.
In the almost identical, content letters addressed to both the International Monetary Fund (IMF) Resident Representative, Mr. Geoffrey Oestreicher and Ms. Kateri Clement, Resident Coordinator, Millennium Challenge Corporation (MCC), the Chairman of the Board of Directors of Prista Oil Holding EAD, Mr. Plamen Bobokov, said “It is with dismay that it has come to the knowledge that the Chairman of the National Investment Commission is engaging in criminal activity of disclosing sensitive financial information of our business model in an effort to solicit a deal that has already been concluded.”
Mr. Bobokov further informed the IMF and MCC that Prista Oil Holding’s Board has approved an investment program of US$277 million to be invested in the Port of Buchanan. He added: “Additionally, we expect about US$200 million to be invested from third parties in the industrial zone and in the city of Buchanan. The new investments are expected to create jobs for more than 5000 people, where as we gave guarantee to the Government for 2000 working places by January 2020.”