ArcelorMittal Liberia Defends Record Amid Rebuke

ArcelorMittal has defended its operation in Liberia as outrage grew over its US$800 million amended agreement signed with the government, which paved the way for the expansion of the company’s mining and logistics operations and ramping up production of premium iron ore.

The agreement, which was signed last month and awaits ratification from lawmakers next year, has been met with rejection by mines communities in Nimba County, where the company operates, over claims that (ArcelorMittal) AML failed to live up to its previous amended mineral development agreement (MDA) with the government.

And the county legislative caucus, which is under immense pressure to reject the US$800 million agreement, recently joined the fray and became vocal in their criticism against the steel giants for its alleged failure to make any significant impact in the lives of the people and develop the concession area.

However, for AML, while the criticism might be genuine, it does not represent the truth and their contribution to improving the lives of citizens in concession areas. And in defense of its operation, the company argued that its presence in Liberia sends a strong signal to the world that the country’s investment climate is positive.

AML noted at the same time, they are giving Liberians a better concession deal which, when ratified, will lead to more than 2,000 jobs created and an additional 1,000 jobs when production volumes increase.

 “The expansion project -- which encompasses processing, rail, and port facilities -- will be one of the largest mining projects in West Africa, making Liberia a major iron ore producer.  More than 2,000 jobs are expected to be created when expansion works kick-off, with Liberians in the majority and an additional 1,000 new jobs later on,” AML said.

“The new 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 reservations for expansion for at least up to 30mt. At these expanded levels, these iron ore exports will create a major boost to Liberia’s GDP,” the company added.

AML also stated its commitment to adding significant value to Liberia’s natural resources by building and producing high-quality concentrate ore since the bulk of iron ore found in Liberia cannot be sold without processing. The company then argued that the amended agreement is more beneficial to the country since its open rail and port are open to other users, including Guinean miners to utilize the Liberian infrastructure for their export. 

But despite AML’s pitch of the agreement’s future potential, they are yet to gain strong stakeholders’ buy-in from communities in its concession areas due to claims of past abandonment and negligence of previous MDA.

For residents of the mining communities, AML is a failure and their presence had not led to any improvement for the concessionaire's 16 years of existence, rather untold sufferings and hardship.

They claimed, among other things, that the company has continually sidelined them in job opportunities, as well as meaningful development; no provision of alternative livelihoods; and failed to rehabilitate community infrastructure; not forgetting the limited provision of quality healthcare delivery systems and quality education.

As a result of these concerns, AML concession communities have strongly objected to the proposed amended concession agreement – accusing the company of reneging on commitments in a previous agreement signed during the Sirleaf Administration.

They maintain that any amendments to the agreement should be informed by AML’s compliance with the terms and conditions spelled out in the 2005 amended agreement since there are only 8 years left on the company’s previous 25-years agreement signed in 2005.

The rejection of the US$800 million agreement by the communities, stems from glorious memories of LAMCO, the mine’s previous operator, when Yekepa had electricity, running water, educational, healthcare, and entertainment facilities, as well as other opportunities, which made residents and workers during that era to see the mining town as a modern European city. 

“We are not impressed with what we have seen here today because, after 16 years of operation in this community, the community is going backward,” said Senator Jeremiah Koung of Nimba County during a recent visit to AML operation areas including affected communities.

Sen. Koung then visibly expressed great disappointment in the company for the lack of improvement after 16 years of existence and almost 10 years of the shipment of iron ore. The Senator’s frustration comes from AML not carrying out “no new infrastructural development” since taking over or improving some concession houses, which has led to some of the housing areas (Areas S - T) being overgrown with high bush.

One famous community, Area ‘F’, which used to host an Olympic-size swimming pool during the days of LAMCO, is nothing but ruins. Meanwhile, AML brought in several portable containers and plastic shelters to be used by expatriates and local workers.

However, the coming of AML has led to a regular disbursement of US$1.5 million to Nimba every year as county social development funds, which the county lawmakers and the government have been in charge of appropriating. Besides, the company provided US$40 million to facilitate the pavement of the road from Ganta to Yekepa and the roadwork is ongoing, albeit very slowly. This is something LAMCO, which began operation in 1963 and ended in the middle of the 1980s, did not do throughout its stay.

Meanwhile, amid concession communities’ accusation that AML has failed them, the company says it has undertaken a major renovation of the existing infrastructure and upgraded health facilities in its concession area and outside of its concession area at an estimated cost of over $18 million.

AML added that, as per the MDA requirements, they have rehabilitated, equipped, and operated two hospitals in Yekepa and Buchanan with over 30,000 people receiving medical care from the health facilities.

“Additional major renovation and improvements are ongoing at the Buchanan hospital. We have also provided direct support to the Liberia Government Hospital and over US$1.7 million has been spent on advanced foreign scholarship in line with our MDA,” the company said.

AML says the $1.7 million spent on “scholarship program... has seen 29 candidates attend universities outside Liberia, and in 2017, reopen the Yekepa Vocational Training Centre at US$7 million, making it a state-of-the-art training facility.  Enrollment to date is 159 students and the first batch of 45 recently graduated in 2021.  The CSDF that AML provides to Grand Bassa County ($1 million) has a scholarship component that currently provides scholarships to students of Grand Bassa County.”

AML further states that Liberians currently hold 66% of the company’s senior management positions, a figure which exceeds the 50% of senior management minimum required by the MDA, and that over 96% of all positions are held by Liberians.

However, the company said that while it understands the concerns about jobs for the concession communities in Nimba, AML is an equal opportunity employer that does not employ people based on religion, ethnicity. Yet, “both Grand Bassa and Nimba Counties have the highest representation of residents in the workforce,” the company says. 

“AML values its relationship with our communities, especially those in proximity to our operations. Since 2006, overpaid $45 million has been contributed to the County Social Development Fund,” the company said. “In response to citizen complaints that the funds were not benefiting the affected communities, AML convinced GoL that 20% of these funds should be managed directly by these communities.  This program kicked off in 2020.”

In terms of housing, AML said it has a full development plan to complete the renovation of the structures to accommodate its employees, while civil works on the water system bore well and the tower has kicked off as well.

Meanwhile, former Grand Bassa Senator Gbehzohngar Findley has filed a lawsuit against AML for its failure to abide by terms stated in the 2005 amended agreement before seeking a new deal under the administration of President George Manneh Weah.