Canadian-American billionaire Robert Friedland was in Monrovia on 18 April to meet with Liberian President George Weah, having previously travelled to Conakry to convene with Guinean head of state Mamadi Doumbouya. During those meetings, Friedland confided to both men that he is near to withdrawing from their countries.
Previously, Friedland had been staking his hopes on his US-registered company, High Power Exploration (HPX), and its subsidiary Société des Mines de Fer de Guinée’s involvement in the Nimba project, which is located in a remote part of south-eastern Guinea. He had planned to export via neighbouring Liberia, by way of a railway extension to the port of Buchanan.
But the mining magnate has now begun negotiations with the Indian group Jindal Steel & Power, owned by Indian billionaire Naveen Jindal, for the sale of the Nimba deposit. Jindal is based in New Delhi and has visited Conakry several times in recent months. He will shortly be awarded the Zogota iron ore deposit (AI, 21/04/23), situated near Nimba, which HPX had its eye on too for some time. During their discussions, Jindal has asked Friedland for guarantees, in particular regarding access to the Liberian railway. ArcelorMittal Liberia (AML) currently has a monopoly over that infrastructure, one that is proving difficult to topple.
ArcelorMittal’s failings
Weah is dragging his feet on the issue. A report from the Special Presidential Committee set up in November 2022 to resolve the delicate renegotiation of the mining agreement between the state and AML is still awaiting the president’s signature, despite being submitted to him on 14 March. Liberia’s Minister of Foreign Affairs Dee-Maxwell Saah Kemaya Sr. chairs the Special Presidential Committee, with assistance from the president’s adviser for legal affairs Archibald Bernard and fellow presidential adviser Emanuel L. Shaw II.
Africa Intelligence has been able to consult the confidential report and can reveal that its contents are a heavy blow for the global steel giant’s Liberian subsidiary. The document highlights AML’s failure to increase production at the Yekepa iron ore mine, which is stagnating at less than 5 million tons of ore per year.
AML is also accused of not having fulfilled its contractual obligation to build two iron ore processing units. While work has started on the Yekepa site, no construction has begun on the planned plant at the port of Buchanan. AML is also suspected of having violated the Investment Incentive Code’s debt ratio, incurring the Liberian state a loss of several million dollars in revenue.
The committee furthermore recommended against ratifying the Mining Development Agreement’s (MDA) 3rd Amendment, which the government signed in September 2021 and Weah signed two months later. In the interim, the procedure set out in the law “appears to have been circumvented or ignored”, the committee noted, stating that it could not determine whether this was “deliberate” or “inadvertent”. In March 2022, Parliament rejected the amendment and referred the matter back to the president’s office.
A much in-demand railway
The railway linking the Yekepa iron ore mine to the port of Buchanan remains at the crux of the dispute. The committee notes the railway’s “poor management” and is surprised at AML’s insistence on remaining its sole operator and user. The infrastructure has deteriorated considerably due to lack of investment, and there have been several derailments, some of which resulted in fatalities.
Last year, in a 17 October presidential decree, Weah entrusted the management of the line to a specially created structure, the National Railway Authority. The president is eager to definitively end AML’s monopoly on the strategic railway line but, paradoxically, is also keen not to rush the process.
Several other mining companies in Liberia and neighbouring Guinea are looking to secure access to the rail line to export their iron. As is Solway Mining, a subsidiary of the Swiss-based Solway Investment Group that Dan Bronstein heads. It is shortly set to start production not far from the Yepeka site.
Yet the Liberian government remains calm as it prepares for HPX’s withdrawal. Monrovia had signed the HPX’s agreement in December 2019, before it was amended in April 2022. When HPX had paid $30m into the coffers of the struggling state to pay civil servants’ salaries, Friedland had insisted on pulling the railway out of AML’s hands.
Washington pressures Weah
Mining groups are growing impatient, given that it has now been over a month since the committee released their report. This is also true of the US administration, equally concerned about Weah’s wavering. Washington is closely following the issue through its ambassador in Monrovia, Michael McCarthy, and is determined that the railroad’s management be entrusted to an independent and American operator.
McCarthy is set to leave his post in Liberia soon, but has managed to convince the government to use the services of a consulting firm, R.L. Banks & Associates, to carry out preparatory studies. The US embassy is also pushing for rail investment and project management company Railroad Development Corporation (RDC) to be given the railway operator contract.
Weah met with CIA director William J. Burns at the organisation’s headquarters in Langley, Virginia during his mid-March visit to the United States. Washington has also been increasing pressure on the Liberian president’s office in recent weeks to have Weah sign the special committee’s report.
Until recently, Weah had been very critical of ArcelorMittal, and of its executive chairman, Lakshmi Mittal, but he seems to have softened his position of late. That change in stance has not escaped Washington’s attention. It suspects that some of those close to the head of state are interfering in AML’s favour, and at the special committee’s expense, with Minister of Finance, Samuel D. Tweah Jr, topping their list of suspects.
Monrovia’s mayor, Jefferson Koijee, has also become an ArcelorMittal lobbyist.
It’s a challenging situation for Weah, who will soon be running for a second term in this year’s Liberian presidential elections. Given Liberia’s troubling economy, he must find a way to appease these powerful foreign investors, whom he cannot afford to completely cut himself off from.
– Joan Tilouine (African Intellegence)
