LIBERIA: In Stinging Letter to Government, ArcelorMittal Cautions Against Encroachment on its Mining Operations
Monrovia – Just seven months after the signing of a landmark amendment to the Mineral Development Agreement (MDA) between the Government of Liberia and mining giant, ArcelorMittal, which should have paved the way for the company’s expansion of its mining and logistic operations in Liberia, relations between the government and the investor appear to be spiraling downward, threatening to stall the activities of one of Liberia’s strongest private sector investors for almost two decades.
$1.6 Billion Invested
The company, in a letter, addressed to the ministers of Mines and Energy (Gessler Murray), Finance and Economic Planning (Samuel D. Tweah), and Justice (Frank Musa Dean, notes that it has invested more than USD1.6 billion in Liberia over the last sixteen years and created more than 3,000 jobs for Liberian citizens.
Additionally, the letter states, that ArcelorMittal has been active in community development efforts, re-opening schools in Yekepa, as well as hospitals, and two clinics, which have served at least 150,000 patients to date. “Over this period, AM has sought to ensure that all Liberian citizens receive the benefits of a revived mining industry, a sector that has been the most significant pillar of Liberia’s development following its long period of civil unrest,” the company’s letter, a copy which was received from credible government sources on condition of anonymity and in possession of FrontPageAfrica noted.
Seen in some circles as the mining giant strongest position yet since the submission of its 3rd Mineral Development Agreement (MDA), to the Legislature, AML could be signaling its readiness to assert its rights under the current MDA. The company also reminded the Weah-led government of its substantial investments which have played a pivotal role in Liberia, being integral to supporting the Liberian economy, especially after the 2014 Ebola epidemic and ongoing COVID-19 pandemic. “All in all, AM’s dedication to Liberia is unquestionable. Indeed, AM remained in Liberia and continued to make significant investments even during the recent challenges facing the country, which prompted many other significant players to exit.”
The company apparently while announcing that it will no longer accept “…encroachment on AM’s rights under the MDA,” reaffirmed its commitment to Liberia. Said the letter “AM is strongly committed to the expansion of the Railroad Infrastructure and capacity to enable it to ship up to a total of 30 MTPA of finished products, as part of AM’s plans to expand the Mine, the Concentrator, and the Buchanan Iron Ore Port. Such expansion will fall within AM’s right to “to develop, use, operate and maintain” the Railroad under the MDA (MDA, Article IX(3)(d).”
The company’s letter comes just weeks after the High-Power Exploration(HPX) Group Companies Ivanhoe and SMFG entered into a framework agreement with the Government of Liberia to establish a path for agreeing to final terms for access to critical rail and port infrastructure, marking the first step in de-risking the world-class Guinea Nimba Iron Ore Project and moving the project closer to realization.
Eyeing Port Jetty Access for Notre Dame
The letter to the government from AML also comes days after the company received a letter from the Managing Director of the National Port Authority, Bill Twehway, asking Mittal to grant access to Notre Dame Investments for entry to AML’s port jetty.
Notre Dame is operated by Angela List, a Ghanaian national and long-time friend of President George Weah.
Notes Dame was also granted a Class B Mining License by the Ministry of Lands, Mines, and Energy for tailing operations in Western Cluster in Bomi Hills as well as in Buchanan.
The recent unfolding developments come amid the arrival in Monrovia of the entire ArcelorMittal Corporate Mining Executive team, in what is being described as the biggest corporate visit for years.
In the communication to Mittal, the NPA MD informed Mittal that the government through the Ministry of Mines and Energy had licensed Notre Dame Investment Liberia Limited to Mine the Iron Ore residue(tailings) which accumulated as the result of Liberian American Swedish Mining Company’s (LAMCO) operation prior to Liberia’s civil conflict.
The letter concluded: “Given our statutory responsibility, we are duty-bound to facilitate national government’s interests thus ensuring that investors are granted access to premises for the fulfillment of their business development proposals. In this direction, I am pleased to notify you that the aforementioned entity would wish to have access within the premises of the oil jetty, specifically the side of the breakwater in order to conduct geo-technical studies as well as to carry out mobilization work.”
ArcelorMittal, in its communication to the government, drew up a laundry list of recent agreements with third parties, encroaching on the company’s operations in Liberia.
Mittal wrote: “It is therefore of concern that AM has become aware of the existence of certain agreements that your government has sought to conclude with third parties, as well as certain licenses that the Ministry of Information presently available to AM give rise to breaches of AM’s rights under the MDA. These apparent violations are at odds with the Government’s legal obligations towards AM and if remained unaddressed, risk bringing about irreparable harm to AM’s current operations and future business plans. Most importantly, they call into question the Government’s commitment to its longstanding partnership with AM.”
Mittal says it feels obliged to write the government, given the recent wave of agreements with other parties trying to encroach on the company’s activities in Liberia.
Mittal informed the Weah administration that despite the encroachment overtures, it is strongly committed to the expansion of the Railroad infrastructure and capacity to enable it to ship up to a total of 30 Million Tonnes Per Annum of finished products, as part of AM’s plans to expand the Mine, the Concentrator and the Buchanan Iron Ore Port. Such expansion, according to the company, will fall within the AM’s right to take up the opportunity to expand the negotiations for the Third Amendment to the MDA.
Additionally, Mittal disclosed that it also plans to expand the Buchanan Iron Port, as entitled under the MDA, and also intends to expand the existing berth infrastructure within the Port as well as the Port’s shipping capacity, in line with AM’s recent discussions with the Government in the context of the negotiations for the Third Amendment to the MDA.
Cancel HPX, Solway Deals, GoL Urged
Regarding the recent signing between the government and HPX, Mittal said it was only informed about the conclusion of an updated Framework Agreement between HPX and the Government(the HPX Framework Agreement), dated 30 March 2022 which it has taken exception to. The company noted, “on its face, the mere conclusion of the HPX Framework Agreement constitutes a serious encroachment on AM’s rights under the MDA, particularly Articles IX(3)(d) and IX(3e). If the Government were to give effect to the HPX Framework Agreement, this will give rise to further violations of AM’s rights under the MDA.”
In this light, Mittal is asking the Weah government to cancel the HPX Framework Agreement forthwith. “AM also trusts that the Government will desist from taking any further steps that may jeopardize AM’s rights under the MDA and the Liberian law generally, and will therefore refrain from taking any action, or facilitating HPX to take any action under the HPX Framework Agreement.”
The company has also taken issues with the government’s decision to grant a license to Solway Mining by the GoL.
Mittal argues that under the MDA, it enjoys an exclusive right and license to conduct exploration, development, production, and marketing of Iron Ore and associated products, as well as rehabilitation of the associated infrastructure in the Concession Area(MDA, Article IV(1). “The Solway License is for “Iron Ore” and the relevant area is within AM’s Concession Area. Accordingly, it is patently clear that the issuance of the Solway License violates AM’s exclusive rights under the MDA,” Mittal stated in its letter to the Weah administration.
The company urged the Liberian government to refrain from taking any further steps that could jeopardize its rights under the MDA and revoke the Solway License forthwith.
Additionally, Mittal also brought to the government’s attention, the granting of two further Exploration Licenses for Graphite, one to Mekinel Holdings Limited (Mekinel) and one to SRG Liberia, Inc (SRG)the Graphite License). Again, the Graphite Licenses were granted without consulting AM.
According to Mittal, the Graphite License contravene AM’s rights under the MDA. “Under the MDA, if AM or any other entity “discovers minerals other than Iron Ore within the “Concession Area”, AM shall be allowed to undertake exclusive exploration and as appropriate, development and production concerning such other minerals following applicable law(MDA, Article IV(1) and IV(3). Notwithstanding AM’s clear rights, the Graphite Licenses are purportedly issued over an area that overlaps with AM’s Concession Area.”
Moreover, Mittal argued that it is provided for under those Graphite Licenses that Mekinel and SRG shall have the right to apply for and be granted Graphite Mining Licenses following the successful discovery of Graphite. “Again, this is a clear violation of AM’s rights under the MDA. AM expects that the Government will respect AM’s rights under the MDA and will accordingly, cancel the Graphite Licenses promptly and will refrain from taking any further actions that would put AM’s rights at risk, including without limitation, granting and mining Licenses to Mekinel and SRG.”
Speaker Overstepping Bounds
For Mittal, the series of recent actions undertaken by the Weah-led government raise doubts about the Liberian government treating AM as its valued partner. “Given the seriousness of the matters addressed in this letter, AM requests the Government to cease any and all actions that violate AM’s rights under the MDA, cancel all agreements granting the right to third parties in AM’s Concession Area, including, without limitation, the HPX Framework Agreement, the Solway License, and the Graphite Licenses, and not take any steps that could risk violating AM’s rights further.”
The saga involving Mittal and the Weah administration has been further heightened by a controversial decision by the Speaker of the House of Representatives, Bophal Chambers, calling for the review of all concession agreements, mainly targeting Mittal.
In a letter to Mittal dated April 18, 2022, from the Chief Clerk of the Lower House, Mildred N. Sayon, the lower body summoned Mittal to appear before the body to discuss the overall status of the operations of the company in Liberia, specifically inclusive of issues such as working conditions of employees, social corporate responsibilities, educational and health/medical programs and facilities, housing, level of commitment and cooperation to government regulations and ordinances.
Legislative observers have raised questions about the Speaker’s intent and motive for calling such a meeting which oversteps his responsibilities. Under the Liberian constitution, the Executive drafts legislation, the legislative passes while the judiciary interprets.
Article 3 of the constitution states: “Liberia is a unitary sovereign state divided into counties for administrative purposes. The form of government is Republican with three separate coordinate branches: the Legislative, the Executive, and Judiciary. Consistent with the principles of separation of powers and checks and balances, no person holding office in one of these branches shall hold office in or exercise any of the powers assigned to either of the other two branches except as otherwise provided in this constitution, and no person holding office in one of the said branches shall serve on any autonomous public agency.”
Despite the ongoing saga, Mittal says it is strongly committed to maintaining and strengthening its strategic partnership with Liberia as it plans to increase its mineral production and expand the infrastructure that is so vital to the country and AM’s operations, while expressly protecting its rights under the MDA.
Tailings are a by-product of mining. After ore containing an economically-recoverable commodity is mined from the earth, that commodity is extracted in a processing plant or mill. After the commodity of value is extracted from the ore material, the resultant waste stream is termed “tailings”.