By Festus Poquie and E.J. Nathaniel Daygbor
In the lush, forested regions of southeastern Liberia, a billion-dollar treasure trove of iron ore lies abandoned, its fate caught in the crosshairs of geopolitical tensions and legal complexities.
The Putu iron ore project, owned by the Russian steel giant Severstal, has been in limbo since 2016, leaving local communities in a state of limbo as well.
The story began in 2012, when Severstal acquired the Putu project, a 13-kilometer-long iron-rich ridge, from Afferro Mining for $122 million. Estimates suggest the site holds up to 4.4 billion tonnes of iron ore, a truly staggering figure.
Severstal had grand plans to develop the project, but a feasibility study revealed that it would require a staggering $3.5 billion in capital investment to bring it to fruition.
Then, in 2014, the geopolitical landscape shifted dramatically. The Ukrainian crisis prompted a series of sanctions imposed by the United States, the European Union, and other international bodies against Russia and its businesses.
Severstal, as a Russian company, found itself in the cross-hairs, effectively cutting off the necessary investment and partnership opportunities to move the Putu project forward.
“Severstal said it will not be able to bring its Liberian iron ore project on line without a partner to help with investment and share risk amid a slump in world ore prices,” the company revealed in a Jan. 2016 statement.
The impact of this stalled project has been felt acutely by the local communities in the mining area.
Since the Putu mining operation shut down in 2016, many residents have been left jobless, with their primary source of income vanishing. The desperation is palpable, as they eagerly await the resumption of activities and the economic opportunities it would bring.
Liberian authorities, led by Mines and Energy Minister Wilmot Paye, are now grappling with a legal dilemma. They are in negotiations with Severstal, seeking an “amicable settlement” to gain access to the 4.4 billion tonnes of iron ore locked in the southeastern region of the country.
The situation is further complicated by local resistance. The Grand Gedeh Group, a collective of citizens and activists, has vowed to resist any attempts to “dubiously sell or give out Putu Mountain” without clear and unequivocal assurances of how the local people will benefit.
The group has accused the government of being influenced by “selfish individuals” in both the executive and legislative branches, who allegedly aim to earn millions of dollars by acquiring the concession and selling it to another company.
Mines and Energy Minister Wilmot Paye told the Oracle News Daily, nothing has been agreed.
As the legal and diplomatic wrangling continues, the billion-dollar iron ore assets remain trapped in limbo, their future uncertain.
The local communities, once hopeful of the economic opportunities the Putu project promised, now find themselves in a precarious position, waiting anxiously for a resolution that could unlock the region’s vast mineral wealth and provide much-needed jobs and development.
