Monrovia – Just days after the U.S. firm, High Power Exploration Inc (HPX), founded by mining billionaire Robert Friedland, signed a letter of intent with President Joseph Boakai’s ruling Unity Party government, and the Guma Africa Group to develop rail and road projects linking it with Guinea, the mining company’s stalled operations in Guinea is raising eyebrows about its desire to put up a corridor and heavy duty railroad connecting the Nimba district of Guinea to a new Liberian deep water port.
By Rodney D. Sieh, [email protected]
The signing trumpeted as the first major power move for the new administration did not give timelines for the start of the project, prompting some sceptics to question whether HPX ideal plan is to flip to another company once a deal is finalized with Liberia.
HPX and Guma Africa entered into negotiations with Liberia’s government to agree on a framework granting exclusive rights to develop, finance and grant operating rights to the Liberty Corridor.
The infrastructure projects, known as the Liberty Corridor, are expected to support the West African region’s connection to world markets and are estimated to cost between $3 billion to $5 billion, HPX said in a statement.
However, a recent report by Africa Intelligence suggests that HPX is finding it difficult to get its foot above water and is experiencing resentment from the Guinea junta.
The report states that more than four years after the acquisition of the iron ore deposit, the US-Canadian billionaire is facing disinterest of the Junta in this asset, whose exploration remains subject to approval by UNESCO.
According to the report, Robert Friedland is having trouble launching his mining activities.
The Nimba project, HPX’s Friedland controls with Société des mines de fer de Guinée, an affiliate of his US company HPX, is still at a stalemate.
The report states that Conakry is delaying a series of approvals required by UNESCO, whose green light is necessary for launching the extraction of this iron ore deposit.
States the report: “The effective launch of the project is facing large difficulties linked to its location. Nimba is situated in proximity to the Mount Nimba nature reserve, which was registered as a UNESCO human cultural heritage site in 1981, and as a world heritage site in 1992. At its last annual meeting in September 2023, the committee of human cultural heritage of the organization decided to keep it on this list. The institute based in Paris also required the Guinean authorities to submit environmental and social impact studies as a prerequisite for “all decisions on approval”.
The report citing summaries of meetings, notes that UN experts also insist that the evaluative works, which have been in progress for several months, are carried out “according to the highest international standards”.
The report further notes that Conakry has not yet transmitted its results to UNESCO, whose next meeting on world heritage is set to take place in Delhi in July.
The report adds that Friedland’s team fear that the Guinean state will condition its approvals on the use of the future CTG railway to ship the material to the port of Conakry.
The AI report says since coming into power in 2021, the military junta of general Mamadi Doumbaya, have increased their discreet appeals to HPX so that this 670 km railway, who construction quietly started after an interruption in July 2022, becomes the privileged route for shipping Nimba production outside of Guinea. This option hardly convinces the tycoon.
According to the report, Friedland fears a saturation of this route, which was designed to export iron ore from Simandou, by the two consortium partners Simfer, an affiliate of Rio Tinto, and Winning Consortium Simandou (WCS), owned by Baowu Steel.
In Liberia, the Liberty Rail Corridor project has sparked both excitement and skepticism within economic and political circles. While initially appearing as a boon for economic development, several questions and concerns have emerged, casting doubt on its feasibility and potential repercussions.
One of the primary concerns raised is the timing and motivations behind HPX’s lobbying efforts against the ratification of ArcelorMittal’s third amendments. Critics question whether HPX was aware of the feasibility of the Liberty Corridor all along or if this is a recent development. Furthermore, HPX’s shifting stance on operatorship of the railway and port facilities raises doubts about the project’s consistency and long-term viability.
Economists have been particularly skeptical about the economic justification for such a massive infrastructure investment. With the iron ore deposit in Mount Nimba estimated at less than 900 million tons, and significant environmental and logistical challenges associated with mining, doubts arise about the project’s profitability. Additionally, the memorandum of understanding between Guinea and HPX imposes limitations on the volume of ore that can be mined and shipped annually, further complicating the economic viability of the venture.
Of particular concern is the potential involvement of the Liberian government in financing the project. While details remain unclear, the language of the press release suggests the possibility of state participation, raising fears of debt obligations falling on the government. Historically, such infrastructure projects have often relied on state guarantees, leaving the government vulnerable to financial risks.