Liberia: House of Representatives Wants ArcelorMittal Concession Agreement Reviewed Amid Claims of ‘Gross Violations’
Capitol Hill, Monrovia – The Plenary of the House of Representatives has authorized the House’s Chief Clerk, Mildred Sayon, to inform President George Weah to authorize the revision of the Mineral Development Agreement (MDA) which was signed with the Government in 2005.
Report by Gerald C. Koinyeneh, [email protected]
Plenary’s decision was based on communication by Representative Samuel Kogar (District #5, Nimba County), craving the body’s indulgence to engage relevant authorities of the Executive to review the MDA.
Rep. Kogar, in his communication, said Article XXXVI of the amended MDA signed in 2013 called for the revision of the agreement every five years. However, that has not happened since 2013, the Nimba County lawmaker said.
Speaking in plenary on Tuesday, July 21, Rep. Kogar warned that if the Legislature continues to ignore the gross violations of the MDA, Nimba County and Liberia will continue to lose as the iron ore gets depleted.
“Mr. Presiding, it is disheartening to note that on a 24/ basis, ArcelorMittal has increased their level of exportation of iron ore. We are afraid that some of these requirements that call for the revision may be ignored if our oversight responsibilities do not cover them. It has the propensity to deny us some of our just benefit and the county and the country will be left with nothing like what happened in the ’70s when LAMCO was mining the mines,” he said.
The Mineral Development Agreement
In 2005, ArcelorMittal, the world largest steel company, signed its first MDA with the Liberian government, allowing the company to begin mining operations in Yekepa, Nimba County and using the port of Buchanan, Grand Bassa county to export the ores. This agreement was then renegotiated and amended in 2006 and then in 2013.
The MDA carries clear conditions regarding sustainable development, economic, social, and environmental investment. It also aims to ensure that, while foreign companies can generate a profit from their investment in the extraction of Liberia’s resources, the country and its citizens benefit as well.
“It is disheartening to note that on a 24/ basis, ArcelorMittal has increased their level of exportation of iron ore. We are afraid that some of these requirements that call for the revision may be ignored if our oversight responsibilities do not cover them. It has the propensity to deny us some of our just benefit and the county and the country will be left with nothing like what happened in the ’70s when LAMCO was mining the mines.”– Representative Samuel Kogar (District #5, Nimba County)
Among other things, the MDA stipulates that ArcelorMittal contributes US$3 million a year to the county social development fund for Nimba, Bong and Grand Bassa Counties. This money in the 25 year-period will total US$75 million. It is expected to be used to drive community development projects that will uplift and improve the lives of local people.
The agreement also includes commitments to infrastructure development, environmental protection and an overall guiding principle of uplifting Liberia and its citizens.
The company is also required to establish and maintain medical and education facilities in its areas of operation, to serve employees, their families, and the broader community and to prioritize the employment and development of Liberians.
However, a legislative inquest conducted by the House’s Joint Committee on Lands, Mines, Energy and Environment, Investment and Concessions and Health, in 2018 found that the company is liable of grossly violating the concession agreement.
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 a processor or washing plant as requested by the MDA.
Rep. Kogar told plenary that the company is still violating some of the provisions in the agreement. He also alleged that the steel company has failed to employ the requisite number of Liberians to certain managerial positions as stipulated in the agreement.
“As we speak, there are some expatriates in the company that still hold those managerial positions,” he alleged, adding that the company is reneging on the payment of US$100,000 to the Ministry of Mines and Energy for scholarships to Liberian students who desire to study Geology and other related mining fields at local and international universities.
Also speaking, Kogar’s kinsman, Rep. Gonpu Kargon (District 4, Nimba County) expressed disappointment over the company’s failure to empower young people of the county while it continues blocking other mining company from operating in the county.
At the same time, Rep. Thomas Goshua (District #5, Grand Bassa County) added that the company has not live up to its commitment of renovating some of the old structures left by the Liberia American-Swedish Mining Company (LAMCO).
“Arcelor Mittal Liberia has not lived by the Mineral Development Agreement. When we were small and used to go Buchanan and Yekepa, we used to call the place small America. But now, if you go to these places, the whole area is a bush,” Goshua stated.
Following sustained deliberations, Rep. Francis Nyumalin (District #1, Lofa County) filed in a motion mandating the Chief Clerk of the House to write a communication to the office of the President, reminding him of the gross violation of the MDA by Arcelor Mittal and to order a revision of the agreement.