MDA Ratification Will Deliver Broad-based Benefits to Liberia in the Decades to Come
A new year brings with it new hopes and expectations. While that is of course the case for 2022, there is also the continuity of picking up where we left off in 2021. We are awaiting a decision from the Liberian Legislature who is currently assessing the proposed third amendment to the Mineral Development Agreement (MDA) which ArcelorMittal signed with the Government of Liberia in September 2021.
ArcelorMittal is embarking on an expansion project, which is a critically important project for ArcelorMittal and the people of Liberia. Once it is ratified and implemented, it will make a significant contribution to Liberia’s economic development in the coming decades. The project is poised to deliver an additional investment of approximately US$800 million – the largest foreign direct investment in Liberia under President George M. Weah’s administration – and put Liberia on the map as a country of enhanced mining stature, a jurisdiction that values foreign partnership, and a country that is open for business in terms of foreign direct investment.
ArcelorMittal has been present in Liberia since 2005 and made the first iron ore shipment in 2011, just two years before the onset of Ebola, which significantly impacted the country’s economy. While I accept there is always room for improvement, I would argue that our presence has been a force for good for all stakeholders in the country since our arrival. Over the past 16 years, we have consistently been one of the largest revenue contributors for the country’s post-conflict recovery and GDP growth by reopening the shuttered iron ore sector and signalling to other investors that Liberia is open for business.
And what I am in no doubt of is that our continued presence in Liberia will bring a plethora of direct and indirect benefits to the country. Our project will create approximately 2,000 new jobs for young Liberians and we will continue to train and develop Liberians so they can establish long-term careers in our company and the Liberian mining sector. Our expanded operations will also create indirect jobs for various SMEs required to support the sector. Our payments into the County Social Development Fund (CSDF) will increase to US$3.5 million a year, and our contribution to Government revenues through various taxes and royalty payments will increase to approximately US$75 million a year. We will constructively engage and work with the Government of Liberia to apply the CSDF in our counties of operations to bring about grassroot and community led development that further deepens our partnership with the people in these counties.
ArcelorMittal and Government of Liberia has extensively debated and negotiated over a 12 month period to reach the current Agreement, which largely covers multi-user access to the rail and port infrastructure and long term continuity of our expanded operations in Liberia .
The fact remains that ArcelorMittal has invested over US$500 million – and will invest a further cUS$200 million – in rehabilitating the rail and port, which continue to be owned by Government of Liberia. This Third Amendment to the MDA establishes a very comprehensive non-discriminatory multi-user access regime for the rail and port, with the Government of Liberia as the approving authority and no monetary benefit to ArcelorMittal from other users.
ArcelorMittal prides itself on being an active and welcomed member of the communities in which we operate. Liberia is no exception, and over the years I would say we have indeed made a significant contribution, investing in a variety of community, housing, education, and healthcare and other projects in Nimba. Grand Bassa and Bong Counties. This is in addition to the US$ 40-million (non-MDA requirement), that ArcelorMittal has committed and continues to spend for paving the Ganta-Yekepa Highway.
I do, however, accept that our engagement with our local communities could improve and hence understand, to an extent, why this has been raised as an issue. I don’t believe it is related to the level or type of support we provide but to our ability to deeply engage and understand how we can better serve our local communities, effectively meet their needs, and if we fall short, ensure there is clear understanding why. Improvement in this area will be a sharp focus for us moving forward.
We strongly believe that the ongoing legislative process will ensure ratification of the MDA as negotiated, agreed and signed with the Government of Liberia, which is critical for long term continuity of investment and further expansion. The MDA ratification process has proved helpful in highlighting some community engagement issues, where there clearly is a need for improvement in how we engage with local stakeholders. Everyone at ArcelorMittal Liberia will be working hard to deliver that improvement.
However, it is critical we all remain mindful of the bigger picture, and what is at stake here is the long term continuity of a large foreign investment for Liberia and a project which will deliver significant employment, social and economic benefits to Liberia for decades to come. Ratification of an agreement that took more than a year to reach will deliver broad-based benefit for Liberians in the decades to come. My new year hope and expectation are we are given the opportunity to deliver these benefits.
The author is CEO of ArcelorMittal Mining.