Liberia: ArcelorMittal, Govt. In Rigmarole over Ownership and Control on Nimba Mountains
MONROVIA – ArcelorMittal Liberia’s (AML) relationship with the Government of Liberia is souring up as the company appears to be protective of its concession area and claiming possession of potential mountains in the county which the Liberian government sees as an illegal move by the company to thwart its sovereignty over natural resources in that part of the country.
Report by Lennart Dodoo, [email protected]
The latest stalemate between the ArcelorMittal and the Ministry of Mines and Energy emanated from an exploration license granted to Solway Mining Inc. to explore Mount Blei in Zor Clan near Logatuo border.
But ArcelorMittal being unhappy with such exploration activities in that part of the county confronted Solway Mining Inc. through a letter informing them of the alleged encroachment on their concession area.
A copy of the June 26, 2020 ArcelorMittal’s communication to Solway in FrontPageAfrica’s possession titled “Unlawful entry and exploration activities in ArcelorMittal Liberia’s concession area” states:
“For and on behalf of ArcelorMittal Liberia Ltd. (“AML”), please be informed that Solway Mining Inc. (“Solway Mining”) has unlawfully entered upon and engaged in exploration activities in an area overlapping the concession area in Nimba County granted by the Government of Liberia (the “Government”) to AML pursuant to the Mineral Development Agreement dated August 17, 2005, as amended (“the AML MDA”).” The communication was signed by Mr. Scott Lowe, the General Manager.
The communication continues: “As you cannot possibly ignore, AML has been granted exclusive mining rights by the Government on the former LAMCO concession pursuant to the MDA. The MDA and each of its amendments, as you should be aware, have been duly ratified by the Liberian Legislature and have the force of law. The MDA includes the exclusive right for AML to conduct, among other activities, the exploration, development and production of mining products in the Concession Area, as this term is defined in the MDA.
“The granting of any concession, license, permit, authorization, consent or else to a party other than ArcelorMittal in its capacity of Concessionaire under the MDA, which would overlap with the Concession Area, would be and is in clear violation of AML’s rights under the MDA.”
The iron ore mining company then instructed Sloway to immediately cease its “unlawful activities and encroachment” in AML concession area. AML further instructed the company to rehabilitate the damage caused in the environmentally sensitive environment where it has been operating.
“Solway Mining must ensure such full rehabilitation is conducted expeditiously and it must leave AML’s Concession Area free of personnel and equipment by no later than 14 days from the date first written above. If Solway Mining were to persist and proceed with any unlawful activities, AML will have no choice but to defend its prior and prevailing rights,” AML letter ordered.
In an attempt to address AML’s concerns which were also communicated to the Ministry of Mines and Energy, the Ministry informed ArcelorMittal that Sloway’s license falls outside ArcelorMittal’s Class ‘A’ license area.
However, in a response to the Minister of Mines and Energy, ArcelorMittal insisted that, “It is clear to AML, and this has been expressly confirmed through independent advice, that you have misconstrued and/or misinterpreted the provisions of both AML’s MDA, as well as the New Minerals And Mining Law of 2000 (the “Minerals & Mining Law”) regarding the Concession Area.”
“One needs not further emphasize that claims to concession rights must be matched by performance compliance. For AML to harbor the notion that “exclusive rights” means it can sit on prospective exploration grounds during the entire lifespan of its mining lease, thereby denying government its rights to explore and development mineral resources within its territorial limits is unfathomable. It is astonishingly inconceivable and regrettable that AML would pursue a route of deception and dodgy tactics apparently from compromised legal counsels to impede further development of Liberia’s mineral resources thereby depriving Liberians of enhanced socio-economic growth and development.”– Gesler E. Murray, Minister of Mines and Energy
The company maintained that the Mineral Development Agreement granted the exclusive right and license to AML to conduct exploration, development, production and marketing of iron ore and associated products and rehabilitation of the associated infrastructure in the Concession Area.
ArcelorMittal referenced Article VI(1)(3) of its Mineral Development Agreement with the government stating it emphatically without equivocation that the Liberian Government “shall from time to time grant AML a Class A Mining License for each proposed Production Area selected by AML (Emphasis ours). Concisely, there is no time or other limitation on AML being granted mining licenses by the Government for proposed production areas within the Concession Area during the term of the MDA and any extended terms”.
Further expanding reasons behind their claim, ArcelorMittal stated “Mr. Minister, that AML is not a holder of an exploration permit. Rather, ArcelorMittal Liberia Holdings Limited is a concessionaire and holder of a concession granted by the terms of the MDA pursuant to which the Government ceded to it the Concession Area with the right to select production areas at its convenience without any obligation to surrender any portion of the Concession Area during the term of the MDA and any extended term thereof.”
ArcelorMittal Pursuing Route of Deception?
In a rather stinging response, the Mines and Energy Minister reminded the iron ore company that it has on several occasions abrogated provisions of the MDA to which it now hangs on as a reliance to challenge the Ministry’s authority.
“It should be noted that the rights granted under a concession agreement have obligations and are non-perpetual. One needs not further emphasize that claims to concession rights must be matched by performance compliance. For AML to habor the notion that “exclusive rights” means it can sit on prospective exploration grounds during the entire lifespan of its mining lease, thereby denying the government its rights to explore and develop mineral resources within its territorial limits is unfathomable. It is astonishingly inconceivable and regrettable that AML would pursue a route of deception and dodgy tactics apparently from compromised legal counsels to impede further development of Liberia’s mineral resources thereby depriving Liberians of enhanced socio-economic growth and development,” the Ministry stated in a communication to ArcelorMittal.
The Mines and Energy Minister emphasized that Liberia as a sovereign state has all the right to conduct research, exploration, development and exploitation of its minerals.
He assured ArcelorMittal that Solway Mining exploration activities would no way interfere with their smooth operations and premised on the metes and bounds of the defining Solway’s Mining exploration area.
According to the Mines and Energy Minister, ArcelorMittal, despite a myriad of default issues, has accumulated during its 15 years of export of DSO without serious efforts to improve the iron ore value chain through processes of ore blending and the production for a protracted period of Run-of-Mine has been inherent flaw in the life of mine performance.
The ministry noted that it has been exercising tremendous patience and flexibility with the hope that AML would shift the paradigm to improve standards and optimize iron ore resource development, but such realization, according to the ministry, now “seems unattainable and far-fetched as indicative of AML’s current posture and nonchalance towards constructive engagement”.
“The undesirable performance of the company has now left it in a state of low operational efficiency accompanied by an unstainable economic cash flow regime; all attributable to its refusal to infuse any further significant capital investment into a project it claims to have a degree of high confidence level,” the minister stated in his letter to the ArcelorMittal.
The Mines and Energy minister further noted that the Government’s decision to grant Solway Mining exploration license was based on the Constitution of Liberia, Mineral Policy 2010, New Mineral Law of 2000, Mineral Exploration Regulations of 2010, GOL/AML MDA of 2005 as amended, Governing Laws of General Applications and Sovereign Rights of the Republic of Liberia.
Lack of Jobs Looms Violence in Nimba
Meanwhile, a youth group in Nimba County under the banner Nimba Education Guide have written the County Attorney seeking permit to protest at the facilities of ArcelorMittal.
A communication to the County Attorney, John D. Miah, the group stated that they comprise over 1,000 youth seeking permit to demonstrate.
According to the group headed by Armstrong Goba Sekekpoh, their decision to protest is premised on their demand for jobs “based on the fact that we have gone to school, graduated and do not have the opportunity to work in the only major concession in our county”.
They noted in their letter to the seeking permit to protest:
“We have a documented evidence before us in which ArcelorMittal openly made it clear that they own all potential mountains in Nimba. Therefore, Government of Liberia does not have the right to go into concession agreement with any other company.
“In view of the above, the leadership of Nimba Education Guide has decided to mobilize its supporters to go to ArcelorMittal on the 20th of July 2020 in demand of (500) five hundred jobs for each of the Mountains in Nimba, including community liaison heads, human resource heads, mine managers and 50% of unskilled jobs.”
Though their request to permit to protest at the facilities of ArcelorMittal was denied by the County Attorney citing, among other things, the COVID-19 pandemic, the group informed FrontPageAfrica that they remain resolute to carry out the protest as they cannot continue languishing in the county with the education attained.
“Our concern is not whether another company wants to come or not. Our concern is that ArcelorMittal should be able to give us jobs. If they own all the potential mountains, they must give us jobs to sustain ourselves. We went to school and came back to the county to contribute to the development of the county but ArcelorMittal is not helping us. We see a lot of Guineans in the employ of the company while Liberians remain jobless,” Mr. Sekekpoh lamented.