AML Snub May Cost Liberia Huge Losses -As Parent Company launches $205 Fund in Canada

An idea of what Liberia stands to lose if the Third Mineral Development Agreement extension is not ratified and signed by the Government of Liberia came in the picture recently when ArcelorMittal Canada, a subsidiary of ArcelorMittal Worldwide and the Regional Government of Quebec in Canada announced that the company will be investing 205 million Canadian dollars in its Port-Cartier pallet plant, enabling the facility to convert its entire 10 million tonne annual pellet production to direct reduced iron(DRI) pellets by the end of 2005.

According to information gathered from the company, the investment, in which the Quebec government will contribute through an electricity rebate of up to CAD$80 million, will enable the Port-Cartier plant to become one of the world’s largest producers of DRI pellets, the raw material feedstock for iron making in a DRI furnace. The project includes the implementation of a flotation system that will enable a significant reduction of silica in the iron ore pellets, facilitating the production of a very high-quality pellet.

The project will deliver a direct annual CO2e reduction of approximately 200,000 tonnes at AMMC’s Port-Cartier pellet plant, equivalent to over 20% of the pellet plant’s total annual CO2e emissions. This reduction in CO2e emissions will be achieved through a reduction in the energy required during the pelletising process.

On a global scale, the investment is one of the benefits host countries accrue from multinational companies that positively impact on the revenue generation capacity of the countries as well as increasing rate of employment and other welfare packages. This project is to provide about 250 jobs for the local economy and further activate the multiplier effects of the investment on the people.

While expressing the support of the regional government for the project, Premier Francois Legault said, “With this project, the Port-Cartier plant will become one of the world’s largest producers of direct reduction pellets. The market is increasingly evolving towards this technology. We are therefore ensuring that ArcelorMittal will continue to create wealth in Quebec for many years. We are positioning our regions at the heart of the green economy of tomorrow. My message to companies looking for a place to reduce their GHG emissions is come and see us. We’ll help you carry out your projects promptly. Quebec is the best place in the world to invest in the green economy. To build together a greener, more prosperous and prouder Quebec.’’

“This project has an important role to play in our efforts to reduce our group’s CO2e emissions intensity by 25% by 2030, and our longer-term ambition to reach net zero by 2050. Not only does it deliver a significant reduction in our emissions at AMMC, but it also expands our ability to produce high-quality direct reduced iron pellets, which we will need in significant volumes as we transition to DRI-EAF steelmaking at our steel plants in Canada and Europe”, he said..

Also giving his impression of the project Aditya Mittal, ArcelorMittal CEO, said,

“I am grateful to Premier Legault and his government for the support it is providing in realising this project. It is the first significant decarbonisation project we have announced for our mining business and fitting that we are able to make this announcement at COP26 as it exemplifies the transformational change we need to deliver this decade as we move towards becoming a carbon-neutral business.”

Also speaking about the relevance of the project,Mapi Mobwano, CEO, ArcelorMittal Mining Canada said will see the company become one of the biggest direct reduction pellet producers in the world, thereby propelling ArcelorMittal Mining Canada into the forefront of mining and steel decarbonisation

“From 2025 onwards we will have the capacity to produce ten million tonnes of very high-quality iron oxide pellets, with low silica content and high iron density, which will be highly strategic in the years ahead. This transformation will enable us to reduce our own current emissions by 200,000 tonnes of CO2e per year – equivalent to removing 57,600 cars from the road each year. Moreover, it will support a significant reduction in the carbon footprint of primary steelmaking.  These pellets are the feedstock for DRI-EAF steelmaking, which given its significantly lower carbon footprint is expected to replace a significant amount of blast furnace capacity in the coming decades. It also provides a boost to the local economy and community as 250 jobs will be created for the construction phase which will start in the summer of 2023”

Investment analysts who spoke to The Analyst on Liberia’s possible losses from not ratifying and signing the MDA believe that Liberia being an iron ore producing country and the need for the country to engage in iron and steel making projects of such nature could be replicated in the country through decarbonization. With the colossal investment of $1 billion from ArcelorMittal into the economy to expand its activities there are every possibility that the mining giant could diversify in other areas of business operations that will further increase the opportunities of the government to rake in more revenue which will also impact on the economic development of the country.

“We stand to lose a lot by the House of Representatives rejection to sign the MDA deal and returning it to the government for renegotiation, which will further delay the taking off of the whole investment package from AML. Let our leaders see reason to sign this deal and then we follow up with AML to abide by all the terms and conditions in the MDA. I see AML expanding in more areas of investment that will benefit the country and its people”, Batholomieu Darby Sayon Jr said.

The refusal of the House of Representatives to sign the MDA has generated a lot of concern among the citizens especially in the wake of AML willingness to improve on areas she did not perform well with respect to corporate social responsibility and further agreeing to directly engage the host communities to hear and understand their issues with the concessionaire. Besides, AML has gone into action to increase its corporate social responsibility activities such as embarking upon interventions in the area of education and job creation.

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