The Swiss group is trying to negotiate a compensation agreement with the Liberian authorities for the loss of its mining permit. In the meantime, it is pursuing its arbitration case, leaving Liberia faced with the threat of having to pay out several hundred million dollars.
Liberian president Joseph Boakai’s trip to Italy for the World Food Forum was disturbed by a business dispute which has yet to be resolved.
Solway, which is contesting the legality of the Liberian authorities’ decision to withdraw its mining permit (now re-attributed to steel giant ArcelorMittal), has turned once again to Boakai to settle the affair and get the government to pay the compensation which the group has been trying to negotiate with it in recent months.
In the meantime, Solway is pursuing the arbitration case it started against Liberia before the Permanent Court of Arbitration in London in November 2023 in line with the arbitration rules of the United Nations Commission on International Trade Law.
Out of court settlement Efforts to reach a negotiated settlement were suddenly called off by Liberian Justice Minister Natu Oswald Tweh. In an official letter dated 11 October, he told Solway that the government would only continue to negotiate if the Swiss group dropped its legal action.
His ultimatum, which did not involve President Boakai, automatically ended the informal talks between Solvay’s management and other members of the government.
Four days later, Solway wrote to the head of state to express its surprise over the justice minister’s decision, particularly given that an out-of-court settlement had been about to be concluded.
Ermolaev asked for a meeting with the president, and was ready to go to Rome. In the Italian capital, Boakai finally granted an audience on 17 October to a large delegation from ArcelorMittal led by its chairman, Laksmi Mittal, who had flown in specially on a private jet.
The tycoon had already had a meeting with the president in Monrovia in April (AI, 16/04/24) to discuss its mining and infrastructure development projects, including the railway coveted by American-Canadian billionaire Robert Friedland (AI, 14/05/24).
Solway is now counting on a meeting that could take place in London later this month, on the sidelines of the Africa Summit organised by the Financial Times.
In Monrovia, the affair, which the government inherited from George Weah’s administration, has whetted appetites. The government has set aside $50m in the funding due from ArcelorMittal, which is anxious to settle the affair to allow it to make the transfer of Solway’s license to it official and legal.
Above all, however, it wants the Liberian parliament to adopt the third amendment to the Mining Development Agreement it concluded with the government in September 2021.
Officially, ArcelorMittal Liberia is not negotiating directly with Solway. Talks have been taking place rather with the government, which was supposed to pay the compensation.
Government maneuvering
Some ministers, including Tweh, only want to pay Solway $30m out of the total $50m. An outline agreement between Boakai and the Swiss group provided for $40m to be paid to settle the affair and stop the arbitration procedure which is currently preventing work taking place at the mine.
Faced with the maneuvering of the justice minister, Solway is trying to deal directly with the head of state.
A memorandum lodged as part of the arbitration proceedings at the end of August estimated Solway’s damages at $350m. Solway is, therefore, entitled to claim this amount, the calculation of which has been approved by the arbitration panel.
So far, the government, via the justice ministry and law firm Kennedys, has tried in vain to argue that the London court of arbitration is not competent to deal with the dispute.
Solway is represented in the proceedings by Signature Litigation but has opted for a last attempt to settle the affair by negotiation.
- Africa Intelligence
