By Festus Poquie
Liberia enters talks aiming to clear legal controversy and geopolitical uncertainties that have stalled mining ventures at one of the country’s vital mineral assets for nearly a decade.
The process of reactivating the Putu Iron Ore Mine has commenced, President Joseph Boakai told lawmaker in a speech Monday.
“This will boost job creation and accelerate development in Grand Gedeh County and the southeastern region.”
The local communities can now be hopeful of the economic opportunities the Putu project promised after waiting anxiously for years, seeking a resolution that could unlock the region’s vast mineral wealth and provide much-needed jobs and development.
The faith of this billion-dollar treasure lying in the forested region of southeastern Liberia has been 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.
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.
It is approximately 100 km to 150 km away from the nearest point of the existing Buchanan-Yekepa railway corridor. While the Yekepa-Buchanan line is being utilized for mining in Nimba County and Guinea, the Putu iron ore project is considered a separate development, often discussed in connection with the potential rehabilitation of southeastern port infrastructure (Greenville or Harper). The mine is about 130 km northeast of the coastal city of Greenville.
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 crosshairs, 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 online 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 are now 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.
