On September 8, 2010, the corporate headquarters of ArcelorMittal, the parent company of ArcelorMittal Liberia (AML) issued a press release entitled “ArcelorMittal and BHP Billiton terminate discussions to combine assets in Liberia and Guinea.” The mining and steel giants were actively exploring at the time a joint venture that would have brought together the ArcelorMittal project in Liberia and the BHP Billiton project on the other side of the Nimba mountain in Guinea. The press release said that “the companies were unable to reach a commercial agreement.”
BHP Billiton and two other investors eventually sold those assets in Guinea to High Power Exploration (HPX) and today, HPX, according to company and official government reports, is in active discussions with Liberia on multiple fronts. This includes an agreement to access the existing rail and port infrastructure between Yekepa and Buchanan to export iron ore from Guinea, and an agreement over the development of the well talked about Liberty Corridor, which is to be a parallel multi-user rail in partnership with Guma Africa Group.
HPX has also reported in the media on the acquisition of other exploration licenses in Liberia once owned by BHP Billiton. With Vedanta’s Western Cluster and should China Union and Putu Iron Ore become active again; Liberia could once again become a major source of the all-important iron ore mineral from the West Africa region.
This brings us to the ongoing discussions today. President Boakai is determined to change the narrative in Liberia in which mining companies come and extract minerals and leave very little behind, or as he said, “ghost towns…with nothing to show.” In addition, he has stated emphatically that the country’s railroads should no longer be single-user but multi-user systems that accommodate other sectors of the Liberian economy and not just the mining industry and certainly not just one company, as is the case with the rail under the control of AML.
ArcelorMittal and HPX for over three years have been in a public tug of war over the Yekepa to Buchanan rail. This is what ex-Finance Minister Samuel Tweah, at a long-winded and rambling press conference, attributed as the cause for his eventual sanctioning by the U.S. Government, saying that he was collateral damage caught in a fight between two billionaires. Well, at least that’s his version of events, and he is entitled to his own opinions but certainly not his own facts.
The Government of Liberia in 2005 made one of the worst economic policy decisions of our time and granted AML the exclusive rights to operate and control the rail — something that this paper has said should be immediately scrapped and is definitely not in the Country’s best long term economic interest.
Reading that 2010 ArcelorMittal corporate press release, it is obvious to any observer the fact that ArcelorMittal was in control of the rail in Liberia when it was negotiating with BHP Billiton in 2010 for a joint venture, clearly placed ArcelorMittal in a position of strength, since it had full control over the very rail that BHP Billiton needed to export its ore from the Guinea Nimba mountain region through Liberia to the Atlantic Ocean via the Buchanan Port.
Ironically, if one were to draw conclusions from that press release, it is fair to conclude that if the joint venture deal with BHP Billiton had gone through, AML would have made access to the rail part of that very deal with BHP Billiton. However, since they are no longer negotiating for that project in Guinea, access to the Liberian rail has now become an impediment, costing Liberia significant loss in revenues that would be generated from multi-user fees to access the rail and use the port.
It is time for the Government of Liberia to step in and benefit from the income that comes when multiple users access its publicly owned infrastructure. Some industry observers believe that AML stands to benefit tremendously as a potential easy and convenient off-taker if the HPX mining project in Guinea fails, hence their complete unwillingness to allow another mining industry competitor access to the Liberian rail, according to one analyst.
Well, thanks to President Joseph Nyuma Boakai, Sr. for emphatically reminding AML “who owns papa’s land.” We call on the Boakai Administration to not negotiate any new amendment to ArcelorMittal’s Mineral Development Agreement that lacks fair access to multiple users of the railway under an independent operator that can set fair tariffs and manage the system in the best interest of Liberia to world class international standards.
We also call on the 55th National Legislature to once again reject any agreement that does not allow fair independently operated multi-user access to the country’s rail infrastructure between Yekepa and Buchanan. We continue to echo the sentiments of His Excellency, President Boakai that Liberia is open for investment, but it is no longer business as usual!
