By Festus Poquie
A Liberian-owned mining company backed by a U.S.-aligned development finance institution has reached an agreement with Russian steelmaker Severstal to acquire control of Liberia’s dormant Putu iron ore project, advancing efforts to unlock a deposit estimated to hold as much as 4.4 billion metric tons of ore.
Africa Metallic Resources Inc. (AMR) said it had signed a definitive share purchase agreement with Severstal, secured government approval for the change of control and entered into a binding memorandum of agreement with Liberia, marking a major step toward reviving the long-stalled southeastern mining project.
The deal involves Severstal, which was designated by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) in June 2022, placing the Russian company and related entities under U.S. sanctions. AMR said the transaction had progressed through relevant U.S. regulatory processes, including engagement with OFAC over applicable sanctions requirements and approvals.
Africa Finance Corporation (AFC), a strategic partner of the U.S. International Development Finance Corporation (DFC), is AMR’s financial partner for the project and will help structure and mobilize the capital needed to finance its development, the company said.
The agreement marks a potential breakthrough after years of unsuccessful negotiations between Liberia and Severstal over the future ownership of the asset.
President Joseph Boakai earlier this year directed Vice President Jeremiah Koung to lead efforts to conclude the transfer, describing the continued delay as unacceptable and the project as an urgent national priority.
Putu, located in southeastern Liberia, contains one of the region’s largest high-grade iron ore deposits, with more than 50% hard ore content, according to the Ministry of Mines and Energy.
Its development has remained stalled since Severstal acquired the mining assets in 2012, amid financing challenges and the impact of U.S. and European sanctions.
The project could attract substantial investment, generate employment, stimulate local businesses and support infrastructure development, particularly in southeastern Liberia, where expectations for economic opportunities from the mineral resource have remained high.
The involvement of AFC and its links to U.S. development finance institutions also reflects the growing role of Western-backed financing in efforts to bring the strategic mineral asset into production after years of Russian ownership and stalled development.
AMR said it was working with technical partners and financial advisers on project planning, engineering and infrastructure preparations, although it did not disclose the purchase price, financing commitments, production timetable or the specific conditions governing completion of the transaction.
The agreement offers a potential route to revive a major mining asset that has remained undeveloped for more than a decade.
