
Monrovia, Liberia – The Framework Agreement between High Power Exploration (HPX), a U.S.-based mining company, and the Government of Liberia executed on March 30, 2022, was touted as a significant step in securing vital rail and port infrastructure for the transportation of iron ore from HPX’s Guinean-Nimba Iron Ore Project. However, a closer examination of the agreement raises concerns over provisions that appear to have exploited Liberia’s financial vulnerabilities, placing the country in a precarious position.
Timing of Agreement: Coercion Amid Financial Distress
The amended agreement was signed on March 30, 2022, just a day before the close of Liberia’s fiscal year. This timing raises suspicions that HPX deliberately delayed negotiations to pressure the government into signing a deal at a moment of financial urgency. The agreement required an immediate payment of $30 million—referred to as “Up Front Payment 2”—to be transferred within four business days, no later than March 31, 2022.
This provision suggests HPX was well aware of Liberia’s urgent financial needs, particularly for meeting payroll and other obligations. Several officials later admitted they had not fully reviewed the agreement before signing, raising concerns about whether HPX exploited Liberia’s desperation to force through unfavorable terms.
Financial Penalties: A Hidden Debt Trap
The agreement imposes severe financial consequences on the Liberian government if it fails to meet certain obligations. Clause 3.2 states if the government did not execute or ratify the Concession and Access Agreement by June 20, 2022, November 30, 2022, or March 31, 2023, it would be liable to repay all upfront payments, effectively turning the $30 million into a debt rather than an investment; while Clause 3.3 adds: “Any failure by the government to meet HPX’s expectations required full repayment of the amount, along with 10% compounded annual interest, within 30 days.”
Rather than a true investment, these provisions suggest HPX structured the payment as an interest-free loan, knowing that any delays in the approval process—many of which could be outside the government’s control—would trigger financial penalties.
HPX’s Exclusive Rights and Control Over Infrastructure
Under the agreement, HPX secured unilateral and exclusive control over Liberia’s vital rail and port infrastructure. Our review shows in Clause 5.1 (b) & (d), the government was required to use its rights under the ArcelorMittal Mineral Development Agreement (MDA) to compel ArcelorMittal to grant HPX third-party access to the Yekepa-Buchanan railway and port.
Also, in Schedule 1: HPX sought long-term exclusive operational rights over these facilities, giving it the ability to dictate access terms for other mining companies.
By demanding immediate and unrestricted access while shifting the burden of negotiations with ArcelorMittal onto the Liberian government, HPX shielded itself from potential disputes while maximizing its own gains.
Foreign Arbitration and Sovereign Immunity Waiver
The agreement further stripped Liberia of its legal sovereignty in any dispute with HPX. Clause 7.2 (a): All disputes would be settled via arbitration under the UNCITRAL framework in London, with involvement from the International Centre for Settlement of Investment Disputes (ICSID). Clause 7.2 (b): Liberia was required to submit to the jurisdiction of U.S. courts in the Southern District of New York. Then in Clause 9.9, the government explicitly waived its sovereign immunity, allowing HPX to sue Liberia in foreign courts and seize government assets in the event of a dispute.
These provisions ensured that any legal conflicts would be settled under laws and jurisdictions favoring HPX, significantly weakening Liberia’s bargaining position.
Further in the agreement, secrecy clauses shielding HPX from Public Scrutiny. In Clause 6 (Confidentiality), the agreement imposed broad confidentiality provisions, preventing public scrutiny of its terms, except for details on payments made to the government. Experts say this secrecy allowed HPX to operate without accountability while exposing the Liberian government to potential public backlash once the details became known.
Granting HPX Control Over Liberia’s Future Mining Projects
Clause 5.4: The government was required to expedite HPX’s access to future exploration licenses and mineral titles “free and clear of all encumbrances.” This clause effectively granted HPX a monopoly over future mining projects without competitive bidding, bypassing established processes to ensure fair competition in the sector.
HPX’s Exit Loophole: Avoiding Its Own Obligations
The agreement also included clauses that allowed HPX to transfer its obligations to third parties while keeping Liberia locked into its commitments.
Clause 5.3 states HPX could assign its rights and obligations to another company without constructing any infrastructure or fulfilling key commitments, while Clause 9.1 pointed out that HPX and its subsidiaries were not bound to honor commitments unless they explicitly agreed in writing, creating a potential loophole to exit responsibilities.
This structure, analysts say, allowed HPX to profit by selling its rights while Liberia remained legally bound to an agreement that may not have been in its best interest.
A Predatory Agreement That Must Be Reviewed
The HPX Framework Agreement, as amended in 2022, appears to have been structured to benefit HPX at Liberia’s expense. By leveraging the government’s financial distress, the company secured exclusive control over infrastructure, imposed severe financial penalties, and locked Liberia into foreign legal jurisdictions while shielding itself from accountability.
What Can Be Done?
Legal and policy experts have called for a full review and potential renegotiation of the agreement, particularly regarding the financial penalties that turned HPX’s payments into an implicit debt, exclusive infrastructure rights that limited competition, waiver of Liberia’s sovereign immunity in legal disputes and the lack of public transparency surrounding the agreement’s details.
With mounting concerns over the exploitation of Liberia’s natural resources through unfair contracts, analyst say the government must take steps to ensure that future agreements prioritize national interests over corporate gains.