Liberia: ArcelorMittal Excuses: Steel Giant Responds To Lawmakers’ Inquest On MDA Violations


Monrovia – The management of ArcelorMittal says it is still committed to implementing the Mineral Development Agreement (MDA) signed with the Government of Liberia back in 2006, after been accused of grossly violating the Mineral Development Agreement, MDA.

Report By Gerald C. Koinyeneh – 00231880881540 / 00231777769531 / [email protected]

The steel company was responding to the House of Representatives’ allegations.

In 2018, the Joint Committee on Lands, Mines, Energy, and Environment along with the committees on Investment and concessions and Health following an ‘intensive’ investigation of the company’s operations in the country, found grossly violating of the MDA.

The MDA was signed in 2005 and amended in 2006, with a focus on sustainable development and economic, social and environmental investment for the company and citizens.

But there have been increasing allegations of violations of the agreement by the steel giant.

And the lawmakers’ recent probe was prompted by a complaint filed to the house plenary by Rep. Joseph N. Somwarbi (Nimba District #3), who asked the body to investigate alleged violations.

Among other things, the company was accused of not rehabilitating some of the old facilities including housing, water treatment plants, railways, and hospitals.

Making specific reference to the Gangra mines in Nimba County, the committee said AML failed to build processor or washing plant as enshrined in the MDA.

The MDA states that a concentrator or processor should be built within two years after the ratification of the agreement. The processor is meant to enhance or maximize the production of iron ores.

The lawmakers were concerned that the steel giant is not maximizing production; something which they fear is at the detriment of the country’s already struggling economy.

In its recommendations adopted by plenary in 2018, the committee among other things called for a complete concession audit and a total review of the MDA.

They recommended that all redundant workers, who were issued letters by AML Management with the hope of reinstating them when conditions improve, be unconditionally reinstated.

Stated the committee: “Cases of illegal dismissal in which due diligence has been done with all required due processes, those employees should be reinstated immediately. Those employees who inherited medical problems as a result of the job and have now be considered physically incapable based on medical advice should be appropriately catered for and compensated.”

The committee also mandated the company to rehabilitate the remaining railroad from Tokadeh to Yekepa and existing houses and other structures including workshops, water treatment plant, and the power to ensure appropriate accommodations with available safe drinking pipeborne water and effective power supply in all the AML operational communities in Nimba, Bong, and Bassa within six months.

The bridges linking Bong County to Grand Bassa County and Bong County to Nimba County should be reconstructed to Public Works standard within one year and called for a guaranteed agreement between the private landowners and ArcelorMittal within the three counties.

The committee also called for the renovation of all clinics and hospital, which it says should be staff and equipped with the requisite medicines and medical supplies within six months.

Same Old Excuses

However, the world’s largest steel company seems to be struggling in Liberia, as it continues to cite challenges it endured during the post-Ebola period.

The post-Ebola issues were compounded with a drastic drop in iron ore price on the world market. The situation saw the company cutting jobs and requesting the government to grant it task break.

ANd in its recent response to the House,  the firm restated the problem although it outlined some of its contributions to the economy.

“The global crash of the market was not the only challenge faced by AML as the Ebola virus disease hit the country in 2014. The combination of events completely de-stabilized AML’s project plans and caused AML to suspend its phase 2 expansion after numerous contractors declared force majeure and abandoned the operation,” the firm said in its February 28, 2019, eight-page response to the House.

The firm assured the joint committee about its continued commitment to the implementation of the MDA.

“In 2006, AML was the early investor in Liberia which signaled that the country was open for business. Throughout the years since the execution of the MDA, the company has contributed over US$187 million in payments to GOL (Government of Liberia),” the firm stated in its eight-page response. The response was read in plenary on Thursday, March 7.

AML stated that it has fully complied with the provisions of the MDA and has paid US$44.81 million in royalties since the commencement of shipment of iron ore in 2011.

It claims to be providing suitable housing for the workforce and that employees homes are fully renovated with water systems, electrical fixtures, and other basic utilities.

As required by the MDA, AML says it has completed the full rehabilitation of the 243 km railroad from Tokadeh to Yekepa and Buchanan Iron Ore Port.

Among other things, the company says it has also paid over US$2.6 million as compensation to more than 730 farmers for land use between 2016 and 2018.

At the same time, AML says it has rehired scores of redundant employees, although it is operating “effectively with a lower number of employees”. Meanwhile, the House has ordered its relevant committee to make a follow-up and verify the company’s accounts.