HPX Breaks Silence -Says US$37m ‘Gesture’ to GOL Account Refundable If…

MONROVIA: The controversies surrounding the payment into account of the Government of Liberia by an international investment institution may have been put to rest when the HPX Group, broke silence on its dealing with the Liberian government and clarified the decisions that  led to its payment of US$37 million into the coffers of the Government of Liberia, saying that the money consists of refundable amounts paid by the company, as a gesture of goodwill,  at the government’s  official request of some of the anticipated fees and taxes that that would be due and payable to the country  if and when a binding concession agreement came into force.

Noting however that “If none did, these advance payments would be refundable to the HPX Group,” the group disclosed that it accordingly made advanced payments of US$7 million in December 2019 and US$30 million in March 2022.

These amounts, the clarification contained, were paid by the HPX Group into the Government of Liberia Revenue Account at the Central Bank of Liberia through the United States Government Federal Reserve Bank of New York.

A communication circulated to buttress the clarification, a copy of which is in the possession of The Analyst, started with the an introductory note on the transaction when it noted that the Government of Liberia and HPX Group Subsidiaries including Ivanhoe Liberia and SMFG entered into a Framework Agreement on 20 December 2019 which was subsequently amended on March 30, 2022.

“The purpose of the Framework Agreement was to set forth the framework for the negotiation of an agreement to secure sufficient rail and port infrastructure in the Yekepa-Buchanan rail and port corridor in order to be able to evacuate iron ore from HPX’s Guinea Nimba Iron Ore Project,” the document indicated.

“The Framework Agreement as amended was announced publicly and received strong support from the Government of Liberia. Since 2019, HPX has continued to negotiate with the Government of Liberia on terms and payments that would be payable to the Government of Liberia once the final agreement is signed,” the HPX Group.

The group explained that “Because the Framework Agreement merely committed the parties to engage in good faith negotiations of a concession agreement on terms that would then provide access to government owned rail and port infrastructure, and not an agreement for the actual use of those assets, it did not require ratification under Liberian law.”

It was apparently against this backdrop that the HPX Group agreed, as a gesture of goodwill, to make refundable advance payments to the Government of Liberia at its official request of some of the anticipated fees and taxes that that would be due and payable to Liberia if and when a binding concession agreement came into force

The advance payments of US$7 million in December 2019 and US$30 million in March 2022, the Group said, are refundable if certain milestones relating to the negotiation and implementation of the concession agreement are not met.

As it stands today, the HPX Group intimated that because several of these milestones have been missed, the HPX Group has reserved its rights to seek refund of the upfront payments.

The company said it has not done so because of ongoing discussions with the Liberian Government that the HPX Group believes will ultimately result in an agreement beneficial to both Liberia and the HPX Group.

“The HPX Group has always been entirely transparent about the fact that the advance payments were made to the Government of Liberia and publicly disclosed them,” the document said.

The clarification furthered,  “HPX remains committed to the development of a world class infrastructure corridor, owned by the Government of Liberia, and operated under the principles of non-discriminatory, multi-user access with each participant to meet responsible access charges, under the oversight of an independent operator not linked to mining operators.”

The company maintains that it remains committed to supporting the Government of Liberia to achieve this vision and welcomes full transparency of all transactions and dealing between the Liberian Government and mining companies and other concessionaires, stating that as a US Company, HPX and its directors and management remain committed to and strongly embrace the highest standards of ethical behavior that are in line with community and government expectations not only in Liberia, but internationally.

The Group then concluded that these standards are subject to and committed to fully comply with the laws of Liberia, the United States of America and other jurisdictions governing all such transactions.”

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