WHAT REALLY HAPPENED BEHIND CLOSED DOORS THIS WEEK? THE CASE OF LIBERIA PRIORITIZING GUINEA IRON ORE OVER LIBERIAN IRON ORE – PART ONE
By Democracy Watch Editorial Board
We will give background first. On September 10, 2021, the President of Liberia witnessed the signing of an agreement between the Government of Liberia and a steel giant, ArcelorMittal in the Executive Mansion. Liberians were made to believe that this amendment of the existing Mineral Development Agreement would bring about US$800 million in additional investment and create about 2,000 new jobs (direct) and about 4,000 indirect jobs. The Government informed us that it had negotiated a better agreement than the 2012 agreement. Even though not perfect, still the country stood to benefit enormously. We were even made to understand that this new US$ 800 million-dollar investment would increase iron production from 5 million tons per year to circa 15 million per year.
The agreement, though signed by the President of the Republic of Liberia in September 2021, it did not reach the Legislature until later in November 2021. Once the Legislature took seize of the agreement, it was their job to review and then ratify the agreement if they believe that the agreement was in the best interest of the Liberian people and Government.
This new agreement would have given the Government 65 million dollars of non-refundable money as signature bonus and reservation fees for rail and port. For whatever reason a Liberian iron ore producer needed to pay a reservation fee for rail and port is still unknown but the agreement provided for that. This was a small win for the Liberian people as they had forced a tax-paying company to pay extra for the use of the infrastructure that is needed to generate the taxes it would be taxing to the Government.
For some strange reason, the House of Representatives refused to ratify the agreement on grounds that it did not provide rail and port capacity for the HPX – a Guinea iron ore company. This has since become a critical issue in the ArcelorMittal negotiation. Our sources have informed us that the Government is almost split 80/20 in favor of supporting the Guinean company rather than supporting ArcelorMittal.
Rather than the agreement going to a conference between the Senate and House of Representatives to reconcile their differences over the agreement, the House took it upon itself to return the agreement to the President for re-negotiation on grounds that the agreement does not provide sufficient rail and port capacity for the Guinean company. While the Speaker was returning the agreement to the President, the Government was signing another agreement with the Guinean company promising to prioritize that company’s rail and port needs over that of ArcelorMittal. All this happened at the end of March 2022.
It is said that the Speaker had received more than US$500,000 from the Guinean company to violate the rule of the Legislature and have the House act unilaterally even though decisions are to be made by concurrence especially since the agreement was already in the conference as per legislative procedures. The Government then received US$30 million from the Guinean company as an advance against the user fees for rail and port. This money is an advance against future revenue while the US$65 million that ArcelorMittal was going to pay was non-refundable. Why would reasonable people make such a decision to sacrifice $65 million (non-refundable) for US$30 million advances against future revenue? The answer can only point in one direction – that like the Speaker, these actors may have been compromised.
As if this wasn’t enough embarrassment already, the Speaker, acting on behalf of his benefactors, the Guinean company, paid US$45,000 to 9 members of the House of Representatives to visit the concession area and write a damaging report to support his subsequent actions.
What is even more confounding is that did the President’s letter to the Speaker acknowledging the returning of the agreement for re-negotiation only go out a day after he met with the investor from Guinea? Once the Guinean investor paid a visit to Monrovia and met with several of the key actors, a lot changed in the last 72 hours.
One can only ask, what happened? Who received what to work against the interest of their country? Would Guinea favor a new company over a company already operating in Guinea? There is nothing to show that such is even remotely possible.
For many years, Guinea has refused to allow its iron ore to be shipped through Liberia. Is it because Robert Friedland, the owner of HPX, has bribed key actors in both countries? Will Guinea even allow HPX to ship more than 5 million tons per year?
There are many unanswered questions about the Guinean rail and port deal that no one from the Liberian Government is interested in asking because they don’t care. What most of the actors care about is what can Robert Friedland give them.
We are coming with part two. There are many more questions and disgruntled insiders are providing us with the information.