Liberia – “AML Concerned About Status of Third Amended MDA”
ArcelorMittal Liberia has disclosed that it “has learned through unconfirmed media reports” that the House of Representatives has made appointments to the conference committee and some other decisions over the past few days regarding the company’s third amendment to the Mineral Development Agreement (MDA), which is awaiting ratification by the Legislature.
However, contrary to the AML’s claim that its MDA is awaiting ratification from the Legislature, the House of Representatives on March 28 returned the company’s 3rd amendment of its existing concession agreement, valued at US$800 million, to the President for renegotiation.
The House, which has had a history of rubber-stamping nearly every concession agreement submitted by the presidency, took the unprecedented decision early that day to reject the agreement in its totality on grounds that it was “monopolistic.”
Yet, the AML in a statement is saying that it is not aware that its MDA has been rejected; rather, the House made appointments to the Legislature “conference committee and some other decisions over the past few days regarding the company’s third amended MDA, which is awaiting ratification by the Legislature.”
“The Company believes that this amendment to the MDA is in the best interest of Liberia and its people, assigned on September 10, 2021, after more than 12 months of negotiations with the Government of Liberia,” the company said in a statement. “AML remains committed to Liberia with its long-term investments that will deliver a project which will bring unrivaled and extensive economic and social benefits to the country for decades to come.”
The statement added that for now, AML is awaiting all facts related to the actions by the Legislature before it will make any further statement on this matter.
The House’s letter
In a letter to the President, accompanying the return of the AML’s US$800 million agreement, the House expressed misgivings about the agreement, particularly the impact of the treaty between Liberia and Guinea on the ownership, operatorship, and users’ rights of the Yekepa to Buchana railroad as enshrined in Article 3 of the treaty with Guinea.
The Daily Observer obtained a leaked copy of the House’s letter, signed by Mildred Sayon, its chief clerk, which noted also that the proposed AML agreement essentially ignores key provisions of the Minerals and Mining Law of Liberia, particularly Article 6, Sections 6.1 to 6.3 and Section 5.3 of the Law.
“Mr. President, the Honorable House of Representatives conveys the following recommendations: That the government retains ownership of the railroads, port of Buchanan, and other related infrastructures; that the government initiates a recruitment process aimed at hiring an independent operator of the railroad to ensure non-discriminatory management of the Railroads and other related infrastructure,” the letter from the House said.
“And any future renegotiation of this concession, other existing concessions, and new concessions gives consideration to the full application of all relevant laws including the Act creating the WASH Commission and the Land Rights Law,” the letter continues. “And that future amendments of the AML MDA, other existing concessions and/or new concessions consider a role for the National Housing Authority to ensure standard and improved housing facilities for employees and their dependents.”
The House, having received the proposed MDA on November 24, 2021, cited Article 3, Section 3(f), complaining that such clause gives the steel giant monopolistic control over Liberia’s infrastructure assets; the port and rail infrastructure with the ability to use its exclusive rights to block other users’ access to these sovereign assets.
Article 3, Section F of the revised MDA, entitled, ‘The concessionaire’s capacity as Railroad Operator’, gives AML “the exclusive right to continue to serve as the operator of the Railroad during the term and any extended term of this agreement… ” Section F(2) puts AML “in charge of daily operations for the benefit of each and all Users in accordance with Railroad System Operating Principles and the Multi-User Agreement (when it becomes effective).”
Section F(3) allows AML to form a wholly-owned subsidiary “for the purpose of recording all the costs, expenses, revenues and activities associated with the Railroad operation… ” subject to certain conditions. The House, having received the proposed MDA on November 24, 2021, cited Article 3, Section 3(f), complaining that such clause gives the steel giant monopolistic control over Liberia’s infrastructure assets; the port and rail infrastructure with the ability to use its exclusive rights to block other users’ access to these sovereign assets.
Moments after the rejection of the ArcelorMittal deal, House Speaker Bhofal Chambers described the decision taken by the House plenary as the ‘greatest achievement to humanity.”
“All that we do is that we seek the best interest of the Liberian people,” the Speaker said. “In the wisdom of Plenary, they have decided to… address the interest of our people. I think this is one of the greatest achievements of humanity — to serve our people selflessly,” Speaker Chambers noted. “Our concern is the act of beneficiation, value added to the process. So that is what we have cataloged and felt that in no way we can have the concession agreement being entertained here without the Executive not renegotiating.”
The Government of Liberia and ArcelorMittal Holdings A.G. made and entered into MDA on August 18, 2005, which was ratified by the Legislature, signed by the President, and printed into handbills. The agreement has gone through two different amendments, on December 28, 2006, and January 23, 2013, respectively.
The 3rd amendment, which was signed on September 9, 2021, could pave the way for the expansion of the Company’s mining and logistics operations in Liberia and allow ArcelorMittal to significantly ramp up production of premium iron ore, generating a significant number of new jobs and wider economic benefits for Liberia.
It includes the construction of a new concentrator plant and an expected substantial expansion of mining operations, with the first concentrate expected in late 2023, ramping up to 15 million tons per annum (‘mtpa’). Under the agreement, the company will have reservations for expansion for at least up to 30mt while other users may be allowed to invest in additional rail capacity.
An analysis of the House of Representatives and the Senate’s recommendations of the 3rd amended ArcelorMittal Liberia MDA is attached to this article.