IPNEWS: The debate over the third-party use of Liberia’s rail and port facilities, as well as ownership reverting to the Government of Liberia, has been deeply politicized by certain actors, including HPX.
However, it is important to clarify that these terms were incorporated into the First Amendment to ArcelorMittal Liberia’s (AML) Mineral Development Agreement (MDA) in 2006 and were later ratified in 2007.
Throughout its operations in Liberia, AML has consistently cooperated with the Liberian government in discussions regarding potential third-party rail users.
Unfortunately, these arrangements have not materialized due to influences beyond AML’s control.
To date, only two entities have expressed interest in using the railway and port facilities as third-party users, both of which are from Guinea: Société des Mines de Fer de Guinée (SMFG), now owned by HPX, and Sable Mining. Notably, no Liberian mining company has requested rail access.
SMFG was previously controlled by BHP Billiton. In 2010, discussions were held between BHP and ArcelorMittal to create a joint venture that would combine the Nimba iron ore deposits in Guinea and Liberia.
However, the deal fell through as BHP valued SMFG at more than twice the amount of ArcelorMittal’s investments in Liberia, a valuation that was unacceptable to ArcelorMittal. Subsequently, in 2013, ArcelorMittal agreed to acquire SMFG from BHP Billiton.
Despite support from former Liberian President Ellen Johnson Sirleaf, the Government of Guinea was unwilling to allow ore from that deposit to transit through Liberia, as then-Guinean President Alpha Condé preferred that ArcelorMittal partner with Rio Tinto to build the Trans-Guinean railway.
ArcelorMittal, unwilling to take on another large infrastructure project, canceled the transaction.
In 2013, Sable Mining requested rail access from the Liberian authorities. ArcelorMittal entered discussions with Sable on the basis that Sable would make infrastructure capital investments from their Guinea deposit to Tokadeh.
However, Sable preferred that ArcelorMittal purchase their ore at the border but was unable to provide product specifications for AML to consider.
Sable Mining eventually succumbed to challenges, including the Ebola outbreak, commodity price crashes, and internal corruption accusations, leading to the collapse of the company.
Around 2019, the Government of Guinea signed an agreement with the Government of Liberia allowing a few Guinean mines to transport their ore via Liberia.
However, this agreement limited the transportation to a maximum of 5 million tons per year. Currently, HPX demands to transport approximately 25 million tons of ore annually, which contravenes the agreement with the Liberian government.
When ArcelorMittal and the Liberian government-initiated discussions in 2021 to expand AML’s operations, it was included in the 2021 MDA that other parties, like HPX, would be allowed to use the railway, with ArcelorMittal serving only as the operator, given that all of AML’s investments are in Liberia. This arrangement was seen as a win-win for the government, considering that ArcelorMittal had spent more than $800 million to rehabilitate, operationalize, and improve the rail’s capacity.
However, this position was denounced and rejected by HPX and its subsidiaries, who insisted that AML should not be allowed to serve as the railway operator.
This was a major reason the Liberian House of Representatives rejected the AML deal, labeling it as monopolistic of Liberian assets.
Nevertheless, the 2021 MDA stated that if the government found that AML, as the rail operator, was sabotaging or infringing on another party’s right to access the rail, AML would be removed as the operator with immediate effect— a condition that ArcelorMittal agreed to.
Our investigation reveals that ArcelorMittal’s third-party rail usage terms were never the cause of other parties’ inability to access the rail. In fact, the MDA clearly states that the rail would be used by others, with all proceeds from third-party user fees going directly to the Government of Liberia.
ArcelorMittal Liberia’s official position on the third-party use of Liberia’s railway and port facilities centers on collaboration, fairness, and strict adherence to existing agreements.
The company has consistently emphasized the importance of shared infrastructure for Liberia’s economic growth and remains open to discussions with potential third-party users, provided such use aligns with the MDA.
ArcelorMittal also underscores the need for adherence to the MDA, fair compensation for the substantial investments made in the infrastructure, and clear operational coordination to avoid disruptions to its activities.
The company is committed to working with the government and other stakeholders to ensure that the use of these facilities contributes to the sustainable development of Liberia’s mining sector and the broader economy.
