Last week, Robert Friedland, the Founder and Executive Co-chairman of Canada’s Ivanhoe Mines and founder of High Power Exploration (HPX), made a significant visit to Liberia. Friedland held a meeting with President Boakai at the Executive Mansion, followed by a press briefing with media reporters. During this engagement, Friedland announced HPX’s intention to invest in Liberia, specifically to construct a new rail corridor for the transportation of raw minerals through Liberian territory from Guinea. The announcement sparked enthusiasm among Liberians, yet questions linger about the feasibility, transparency, and true benefits of HPX’s proposed venture. Many wonder precisely where HPX intends to build this corridor and when the actual work on the ground will commence. This skepticism is compounded by HPX’s commitment to invest in the Lobito corridor, a US Government initiative aimed at establishing a railway route for transporting critical raw materials from the Democratic Republic of Congo (DRC) and Zambia to the EU and the US.
While Friedland’s announcement promises economic development for Liberia, many Liberians are raising doubts about the practicality of implementing such an ambitious infrastructure project with the iron ore deposit in Guinea. Moreover, concerns arise regarding HPX’s funding strategy for the $5 billion investment in Liberia and the allocation of these funds. Meanwhile, Liberia’s Presidential Press Secretary, Kula Fofana, announced on her official Facebook page late Saturday that HPX has committed to invest $5 billion in Liberia and to construct a “rail corridor.” This is indeed good news for Liberia; however, we must ask the critical questions so that the hope of the people of Liberia is not dashed or left in limbo in the long run.
US$5 billion is no small investment. So, how is HPX mobilizing the funds for the investment? What will the funds specifically go toward? Critics also question HPX’s motives, pointing out the company’s tendency to obscure its intentions behind its American ownership. Despite being an equity investor in I-Pulse, an American firm, HPX’s maneuvers in Liberia’s mining sector raise concerns about its commitment to fair competition and transparency. Furthermore, HPX’s proposal for a rail corridor in Liberia raises eyebrows given the existence of the Yekepa-Buchanan railway expansion project, which already has available funding from ArcelorMittal Liberia. HPX’s announcement to build a separate corridor prompts speculation about its true agenda and its willingness to collaborate with existing stakeholders in the sector.
The Lobito corridor, referenced by HPX as a model for its Liberian project, has garnered international attention and investment, yet HPX’s involvement in this initiative remains unclear. The corridor, aimed at enhancing trade within Africa and connecting with global markets, stands as a separate entity from HPX’s proposed venture in Liberia. Moreover, the lack of clarity regarding HPX’s connection to the Lobito corridor underscores the need for transparency in its dealings with Liberia. Liberians await concrete answers about how HPX’s investment will directly benefit the country’s interests and which mining and logistical operations it will support. It should be noted that Article 3 of the draft AML – Liberia Government Third Amendment MDA, forwarded to the Liberian Legislature in September 2021, establishes a multi-user rail framework where multiple mining firms can utilize the Yekepa–Buchanan railway. However, the main contention is HPX wants ArcelorMittal to be removed as the operator of the multi-user arrangement, even though ArcelorMittal has invested over US$500 million for the restoration and maintenance of the rail and Buchanan iron shipping port.
HPX says it wants to “Rehabilitate rail infrastructure along the abandoned rail right-of-way from Tokadeh northwards to Yekepa, which was operated until 1992, and “Build 2-3 km of new rail, linking the existing rail right-of-way at Yekepa to the Guinean border where it will join a short segment of rail leading to the proposed, nearby iron ore mine, and develop port facilities to handle the incremental ore to be delivered to the Liberian coast, whether by increasing the capacity of existing port facilities at Buchanan or building new facilities in or near Buchanan.” Apart from the tiny extension of the railway from Tokadeh to HPX’s operational site in Guinea, all the activities listed by HPX are already in ArcelorMittal Liberia’s Phase Two Expansion plan.
AML has already begun a new investment of an additional $250 million to expand the capacity of this very railway. AML’s Phase Two Expansion is making further investments in the port of Buchanan, mainly through a new fixed ship loader that will have a loading capacity of 6-8,000 tons of iron ore per hour, and the construction of a concentrator at the mine site in Yekepa, which will produce iron ore pellets, enabling ArcelorMittal to increase its production capacity to 15 million tons per year. Ivanhoe Liberia, which is owned 100% by HPX, has on its website: “Specific institutional and legal arrangements for the expansion and operations of the rail infrastructure from upper Nimba County, Liberia, to a port on the Liberian coast, are under negotiation.” It makes no mention of its parent company- HPX’s reported plan to build a “rail corridor” anywhere in Liberia, but instead the intention of the company to use the already existing railway made operational by the investment of more than $500 million by the global steel giant ArcelorMittal.
In conclusion, while HPX’s pledge to invest in Liberia’s infrastructure is met with optimism, skepticism persists regarding the company’s intentions and the feasibility of its plans. Transparency and collaboration with existing stakeholders are essential for ensuring that HPX’s endeavors in Liberia contribute positively to the country’s development.
