As the George Weah Government hits its 4th Anniversary next January, and the macroeconomic complications inherited gradually give way to solid stability, it is becoming clearer by the day that multilateral and transcontinental concessionaires are now developing much confidence and are poised to leverage their innovative and resource powers to boost the Liberian economy. Many who had been on a wait-and-see and were seen mincing with their investment choices are now shaking up their reservoirs and emptying their coffers into the Liberian trade ecosystem towards improving lives. ArcelorMittal is one of the progressive ones. Following months of negotiation between the Company and the Government of Liberia to amend the decade-old mineral concession agreement, a rather mouthwatering agreement is derived, with bundles of lucrative promises for Liberia and its people. The Analyst reports.
The Liberian Government, under the watchful eyes of President George Manneh Weah, has sparked a major economic boom with mutual benefits with the signing of the third amendment to the Mineral Development Agreement (MDA) with ArcelorMittal-Liberia. Pundits believe the new amendment will pave the way for the expansion of mining and logistics operations in Liberia which will enable the company to significantly ramp up production of premium iron ore, generating significant new jobs opportunities and wider economic benefits for Liberia.
The expansion project – which encompasses processing, rail and port facilities – will be one of the largest mining projects in West Africa, as the capital required to finalize the project is expected to be approximately $0.8 billion, as it is effectively a brownfield expansion.
The expansion project includes the construction of a new concentration plant and the substantial expansion of mining operations, with the first concentrate expected in late 2023, ramping up to 15 million tonnes per annum (‘mtpa’).
Under the agreement, the company will have reservation for expansion for at least up to 30mt. Other users may be allowed to invest for additional rail capacity.
Given an overview at the signing ceremony, the Chairman of the National Investment Commission, Atty. Munwah Gray who is also the chairman of the Inter- Ministerial Concession Committee (IMCC), the MDA was originally signed between the Republic of Liberia and ArcelorMittal in 2005 and that the occasion was intended to restate and amend the agreement for 25 years.
Signed in the Presence of President Weah and the Executive Chairman of ArcelorMittal International, Mr. Lakshmi Mittal, the agreement stands spur immense economic benefits in the area of creating 1000 direct jobs, 2000 temporary construction related jobs and about 4000 indirect jobs with increase of money going into communities of impact in Grand Bassa and Bong Counties, according to President Weah in remarks at the Jamaica Resorts last Friday, September 10, 2021.
“I am told that with this signing of the third amendment of the MDA, ArcelorMittal will invest additional 800 million United States dollars into this Phase-2 [of the] iron ore project which will enable them to move from producing five million metric tons to 15 million tons a year in the next two years,” President Weah disclosed.
Another benefit of the amendment of the MDA the President cataloged is the significant contributions it stands to make to the Liberian revenue deposit. According to the Liberian leader, 55 million Unsuited States dollars will be contributed to the revenue by the ArcelorMittal to reserve of 15 million metric tons of iron ore for company in addition to what the President referred to as ‘10 million US dollars signing bonus’, maki9ng the total amount to 65 million United States dollars; the President also pointed to the construction of multi-user rail system to be built for transpiration of iron ore.
President Weah historicized how the Executive Chairman of the company, as part of his protocol, attended during his end of June visit to Paris at the invitation of French President Emanuel Macron, requested audience which he granted at the time.
“I was informed by my protocol during my trip to France that they had received a request from Mr. Mittal to have an audience with me to discuss matters of mutual interest between the company and the government. I thereupon granted the request of Mr. Mittal’s audience in presence of my senior ministers and advisors.”
Dr. Weah disclosed that during their meeting, the ArcelorMittal executive chairman outlined a number of new investment initiatives that his company intended to make in Liberia which includes an amendment of their existing MDA.
“He also disclosed that the company has, for the past two years, being trying to agree a term under which the existing ArcelorMittal existing MDA could be expanded in the long term mutual interest of Liberia and ArcelorMittal as a foreign direct investor in the country,” a partnership which the President said has now lasted for some years.
“I listened to all that he has said and encouraged him to continue to negotiate with my ministers in good faith. I made it clear to him that I do not negotiate agreements with foreign investors but I assured him that if he could convince my government of his willingness, ability and capability to perform the undertaking and commitment he suggested that it is likely that an agreement could be reached to extend the existing MDA,” the President said.
President Weah said Mr. Mittal promised him at the time that if the negotiations were successful, he would come to Liberia to witness the signing ceremony in person in order to signal to the world that Liberia is investment friendly and to confirm that Liberia remains open and ready for serious business and investments.
Treating the assurance by Mr. Mittal with reciprocity, President Weah also promised to witness the signing ceremonies with his team to observe the signing if the negotiations were to be on good footing, saying, “This is why I am here.”
“This should show that I am a man with my words. I am a talk-and-do person; my presence is a promise kept,” he said with an applause.
He then applauded the company and told its executive chairman: “Thank you, Mr. Mittal, for your attention to the country. The government considered you an important ally in its drive to accelerate the growth contained in our national development plan, the Pro-Poor Agenda for Prosperity and Development. We look forward to a stronger partnership.”
The Liberian leader said further: “We are delighted to have reach this important agreement with ArcelorMittal Liberia, our long-term partner in the development of the mining sector in Liberia. This agreement demonstrates to the world that Liberia welcomes foreign direct investment and is a key emerging destination for capital.
“It further supports the Government’s ’Pro Poor’ agenda, which is underpinned by the importance of creating jobs to lift Liberian citizens out of poverty. The further investment by ArcelorMittal in Liberia bears testament to the company’s confidence in the future of this country. We are confident that our constructive working relationship will go from strength to strength.”
Speaking earlier, ArcelorMittal Executive Lakshmi Mittal indicated that it’s his first time visiting Liberia after the upsurge of the Corona Virus that pervades the world and commend the government that it has worked harder to contain it.
Mr. Mittal also commended President Weah for allowing the process of the amendment of the ArcelorMittal project in Liberia and also expressed strong commitment to the process that have started to unfurl, pointing out that the project will enable both parties to know each other better.
He further cataloged the contributions of the company since its operations in Liberia including the construction of schools, and hospitals amongst others, adding that the company’s commitment is very strong towards the implementation of the terms of the extension.
Mr. Mittal reaffirmed that the exercise would create additional job opportunities, adding that more than 4000 jobs are to be created in the country as a result of the amended agreement.
“We see ourselves as partners of Liberia,” he said, pointing out that he is confident the project will succeed with the support of all parties to the agreement, pointing out that with the signing of the agreement, the company is to be here for 25 years.
Executive Chairman of ArcelorMittal, Mr. Lakshmi Mittal further asserted: “The expansion underlines ArcelorMittal’s long-term commitment to Liberia and the importance of a continued productive partnership with the government which helped bring this project to fruition. I would like to thank President Weah and his administration for their invaluable commitment and support which has been critical in enabling us to sign today’s agreement.”
He further said that the expansion of mine, processing, rail and port facilities is the largest iron ore project in West Africa and will draw international attention to Liberia as an attractive country to invest in.
The current planned expansion is part of a long-term commitment by ArcelorMittal to Liberia that includes undertaking planning for the further expansion of our iron ore asset to at least 30mtpa.
Also Speaking at the occasion was Aditya Mittal, the Chief Executive Officer of ArcelorMittal, who indicated that the project is an important component of the company’s strategic growth program, designed to ensure ArcelorMittal captures the best organic growth opportunities within our business.
“The Phase 2 expansion in Liberia is an excellent example of how we can leverage growth opportunities within our existing asset base to deliver sustainable, long-term value,” he said.
“Signing the MDA amendment will enable us to capitalize on and add to the infrastructure investments previously undertaken and transform ArcelorMittal Liberia into a large-scale, premium product operation.”