Liberia: Govt Wants AML US$25m Removed from Nat’l Budget and Replaced with An Expected US$30m from HPX

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MONROVIA – The Legislature is being asked to recast the 2022 National Budget in order to remove the US$25 million contributed by ArcelorMittal Liberia (AML) as a result of the need to ratify its Mineral Development Agreement No. 3. AML’s contribution would be replaced it with an expected US$30 million resulting from the signing of a framework agreement between the Executive and HPX – a mining company opting to use the Yekepa-Buchanan railway to export iron ore from Guinea.

This means the legislature would be dropping an already secured US$25 million for US$30 million for a concession agreement that is yet to come before them.

The HPX is reportedly calling for the management of the rail from Guinea to Buchanan Port.

“They have brought it to us to remove the ArcelorMittal US$25million and replace it with the expected US$30 million from a framework document signed between the Executive Branch of Government and HPX,” Senator Prince Moye Co-chair on the Ways, Means and Finance Committee stated.

He made the disclosure in session on Tuesday.

Senator Moye also said the recast process has discovered US$25 million as “new Money” to be appropriated in the 2022 National Budget with funding from the World Bank (loan) of US$15 and US$5 million from

Western Cluster Mining Company.

“We are not appropriating US$806 million but we are instead adding US$25 million “new Money” to the US$700 million passed in the 2022 Budget to take it to over US$811 million.”

Senator Darius Dillon of Montserrado County questioned the possibility of a passage of the recast budget by the legislature without receiving a performance report from the executive for previous money approved by the legislature.

Dillon expressed concern over an existing agreement between the Government of Liberia and HPX that is standing as a guarantor for the provision of US$30 million to the recast budget.  “We are not against the passage of the Budget that is supposed to impact the lives of our people, our role is to critique and ensure that proper things are done before the passage of the budget,” he said.

Last week, the House of Representatives speedily approved the recast budget for 2022 inclusive of grants as submitted by President George Weah. 

President Weah, in a letter to the House, said the extra fiscal space was yielded through internal reprioritization of existing programs, identifying additional resources, as well as a World Bank Loan of US$15 million and that the remaining US$5 million would come from the mining sector.

This came as the rebound momentum of the Liberian economy appeared to be on course — achieving the target of 4.5 percent in 2022, up from 4.2 percent experienced in 2021 — and is expected to be driven mostly by increased activities in both mining and the non-mining (agriculture, manufacturing, and services) sectors.  

Where does ArcelorMittal agreement stand?

In this new revelation, it appears that the Government of Liberia (Legislature and Executive) has rejected a portion of the ArcelorMittal amended concession specifically the rail management portion of the proposed Mineral Development Agreement which stands as a crucial part of the amendment, and accepted a deal from HPX that is probably US$5 million more than what was offered by AML.

The ArcelorMittal deal is a potential US$1 billion investment that is poised to be the biggest in the mining sector in West Africa.

In September of 2021, Liberia and ArcelorMittal signed a landmark third amendment to the company’s Mineral Development Agreement (MDA) which would pave way for the expansion of the company’s operations with additional investments.

There have been so many sticky and unresolved issues surrounding the passage of the new MDA which has been languishing in the corridors of the Capitol for the past nine months.

ArcelorMittal started its investments in Liberia in 2006 when the country was just rising from the ashes of 14 years of brutal civil war that broke down every fiber of the country including education and infrastructure but has since been one of the highest tax-paying companies in Liberia.

The amendment currently before the Legislature/or the government is the third since it began operations in Liberia. Mr. Coenen informed FrontPageAfrica that the negotiations for amendment three started in 2016 just before the crucial 2017 general and presidential elections which slowed down the negotiations.

In 2019, negotiations were recommenced, and the Liberian government was keen on putting in plain language the multi-user rules of the railway running from Yekepa, Nimba County to the Port of Buchanan in Grand Bassa County.


Mr. Coenen disclosed that much of the 51 weeks of negotiation with the Inter-ministerial Concession Committee (IMCC) and their international advisors were centered around the rules and terms that would allow other parties to use the rail and port infrastructure.


The hitch in passing MDA Amendment Three began when the Liberian Senate made several changes to the version earlier passed by the House of Representatives and sent to them for concurrence. Upon scrutinizing the document, the Senate made some changes to the amendment and sent it back to the House with the recommendation that a conference committee is set up to sort out the differences for passage.

The Senate did not concur with the House in ratifying the draft MDA because it did not address most of the concerns of residents of the affected communities. The Senate accused the government’s negotiators during the crafting of the draft agreement of making several waivers to the detriment of the state.

“With the loss of time, comes financial implications for services and logistics being procured, risks to employment opportunities, the huge financial and economic benefits to country. We’re a business and must fully assess all these risk factors continuously.,” said Mr. Joep Coenen, the new Chief Executive Officer of ArcelorMittal Liberia in an exclusive interview with FrontPageAfrica.

In April this year, FrontPageAfrica reported on the ‘secret’ signing of a framework agreement between HPX and the Government as the possible reason behind the stalling of ArcelorMittal’s third MDA.

The signed amended and restated Framework Agreement with the HPX confirms the Liberian government’s principles for HPX’s non-discriminatory access to Liberian rail and port infrastructure and identifies HPX’s requirements for the future evacuation of ore from the Guinean Nimba Iron Ore Project.

The Framework Agreement, which is immediately effective, also sets out a timetable for detailed negotiations and the implementation of a definitive Concession and Access Agreement for HPX’s infrastructure requirements.

As per the Agreement, HPX looks forward to having the right to extend the railway facility from Yekepa to the Guinea-Liberia border and have access to the Yekepa-Port of Buchanan rail.

HPX group companies Ivanhoe Liberia announced over the weekend that “the Government of Liberia will grant HPX usage of the Infrastructure Corridor in accordance with its rights and obligations under its current Mineral Development Agreement with ArcelorMittal, and will seek to resolve with ArcelorMittal the technical and commercial terms for HPX’s usage of the Shared Infrastructure in accordance with that Mineral Development Agreement.

Our high-level source who has been reviewing signed copies of the framework document points out that the document appears to have been signed between Saturday, March 26 and Monday, March 28, 2022.  While the title page carries a date of March 30, our source is certain that the HPX Framework document was signed much earlier than that.

The Framework Document, a copy of which FrontPageAfrica has obtained revealed that the Liberian government had been receiving payments from HPX Ivanhoe Liberia and the government failed to make public pronouncements on the payment. The Liberian government on December 23, 2019 received the first payment of US$7 million for the railway deal, according to the Framework Agreement.

The Framework Agreement referred to this upfront payment as “deposit”.

“It is recorded that Ivanhoe Liberia has paid to the Government a payment of US$7 million on 23 December 2019, which is referred to as the Deposit in clause 7.1 of the 2019 Framework Agreement and hereafter referred to as the “Up Front Payment 1”; the Framework Agreement states.

It continues: “the Up Front Payment 1 is no longer currently due for reimbursement and upon an event of default, the Government shall repay the Up Front Payment 1 in accordance with Clause 3.2 below; and

“nothing in this Agreement shall affect or prejudice any claim or demand whatsoever which any Party has against the other Party under clause 7 (Deposit Payment) of the 2019 Framework Agreement as amended and restated in this Clause 2.3(b); and

Billed as “Up Front Payment 2”, HPX is to pay the government US$30 million.

The payment line of the framework document specifically and categorically states that payment will be made “…with evidence of SWIFT transfers made within 4 business days on or before 3/31/22” 

The Framework Agreement states: “a payment of US$30 million (the “Up Front Payment 2”) within 4 Business Days of execution of this Agreement, with evidence of SWIFT transfers made on or before March 31, 2022; and

“a payment of US$25 million upon the date falling 10 Business Days after the date on which the Concession and Access Agreement is fully effective and legally binding and the HPX Group (and/or its nominees) has unimpeded legal and physical access to all of the Infrastructure Corridor as is required to implement the HPX Project, to the satisfaction of the HPX Group (the “Up Front Payment 3”).”

The signing of the HPX Framework Agreement comes in the wake of the rejection of ArcelorMittal’s third MDA amendment which the House of Representatives has sent back to the Executive for renegotiation.

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