HPX/Ivanhoe Liberia Project Is ‘Solid’

Guy de Selliers, Chairman, Ivanhoe Liberia Ltd, & SMFG

— Company executive says as Senate leans toward multi-user rail access

Guy de Selliers, Chairman of Ivanhoe Liberia, a subsidiary of mining giant HPX, says the mining outfit is making a lot of progress on its West African projects in Liberia and Guinea. HPX is poised to mine one of the most valuable iron ore deposits in the world, located at the head of the Nimba mountain range in Guinea. 

The company’s progress comes on the strength of an agreement between the government’s of Guinea and Liberia to allow the miner to use Liberia’s rail infrastructure from Yekepa to the Port of Buchanan for export. In Liberia, HPX and Ivanhoe will invest US$600 million in upgrades to the rail and port infrastructure to facilitate its export operations. 

“We've made a lot of progress, we've completed our pre-feasibility study, which demonstrates it's a solid project and the amount of investment is pretty high. In Liberia alone, it is going to be more than US$600 million,” says Guy de Selliers, Chairman of Ivanhoe Liberia. “It will create quite a few jobs, about 500 jobs in Liberia alone and that's because we have to expand the capacity of the Yekepa-Buchanan Railroad and we will be building a lot of facilities in Buchanan to stockpile and manage the ore there and loading. Just the port alone is going to cost US$100 million.”

FIngers crossed, the entire deal is contingent upon the Liberian Senate’s concurrence with the House of Representatives to open up the Yekepa-Buchanan railway for third-party users. HPX’s access to the crucial rail infrastructure was threatened by a bold move by steel giant ArcelorMittal, which sought exclusive rights to the railroad through an early amendment to its mineral development agreement (MDA) with the Government of Liberia. However, the Liberian House of Representatives rejected ArcelorMittal’s call for exclusive rail rights, a move that the Senate is also inclined to uphold. 

Both houses of the Legislature acknowledge the immense economic benefits of third-party user access to the rail and port infrastructure. “If we allow the railway and the port to be accessible to third parties, tremendous financial and economic benefits will be derived therefrom,” said Senator H. Varney Sherman, speaking on behalf of a Senate joint committee that vetted the ArcelorMittal third amended agreement. 

“I think the Government of Liberia is generally supportive of the idea of maximizing the use of that infrastructure,” Mr. de Selliers responds. “Unfortunately, the third amendment of the ArcelorMittal MDA makes it very difficult to give access to other people. And I think it's of concern certainly to us and it is of concern to the government. It clearly was of much concern to the House of Representatives who did a very good analysis and realized that the agreement, the way it was, gave absolute monopolistic rights to ArcelorMittal. And I don't know what the Senate is going to decide but I hope they are going to do their homework the same way as the House did. 

“I want to clarify that we think that the concentrator and mining expansion project to be done by Arcelor is very important for the country and the region and we are totally, totally supportive of it. So we're not trying to block Arcelor in any way, shape or form, we want to work with them,” he says. “And in order to maximize the benefits of that infrastructure, instead of carrying 15 million tons per year, as Arcelor is planning, it could carry 45 million tons per year and more. And we will pay our share of it. So we believe in collaboration, absolutely, partnership with the government, and collaboration with other major users like us.”

Last month, the EU Vice President Josep Borrell remarked that the investment by ArcelorMittal “is by far the largest in the country and will be one of the largest mining projects in West Africa.” But he quickly noted that “one of the objectives of the amended MDA is to share the railway among the three mining companies in Liberia and in Guinea so that transport services are open to the two other mining companies in Guinea.

“There are benefits for the country and its citizens, foreign investments being essential for Liberia’s development. For the EU this investment, with its link to the viability of a decarbonised steel industry in Europe, is of high importance,” Mr. Borrell said.

“I read his remarks very carefully,” said Mr. de Selliers. “He did say it's a very important project, but he also said very clearly that multi-user access is very important. So it was not a blank endorsement of the amendment the way it is currently presented. But it's an endorsement of the project itself and an endorsement, in a way, of our project, because of maximizing the use of that infrastructure.

Meanwhile, HPX, headed by mining entrepreneur Robert Friedland, has been revving up much investment interest for its Guinea and Liberia operations. 

“Friedland is a bit of a legend,” Mr. de Selliers remarks. “He's certainly been one of the most successful mining entrepreneurs in the world. He's been in the mining hall of Fame in Canada and in the US, named one of the three most influential people in the mining industry in the world in the last year, after Xi Jinping. He was one of the key speakers at the Saudi Arabian forum and he talked about what we're doing in this region. There's a lot of interest and there's a lot of opportunities to bring some Middle Eastern money into the region [for this project].”

In terms of HPX/Ivanhoe’s support to the government and people of Liberia, he said: “We made it very clear to the government that we are happy to support the budget. I know that Arcelor promised $55m and we propose to work collaboratively with Arcelor and split it. We will pay our share and they pay their share and the budget will be supported. We're there to help the government. 

“We will soon come out with a video about the kind of things that we do as a group. And you will see that it's very much part of the culture the company Robert Friedland has developed. It's very visible in the Congo, to really care about the workers, and about the environment where we operate. So we will definitely want to have good medical facilities for our health and for the local population as we do elsewhere. We will want to provide education. We want to emphasize safety, proper environmental practices.

“Most importantly, we believe very strongly that it is our responsibility, as big mining companies developing a railroad, to make sure that railroad also directly benefits the people through passenger and light freight traffic. It will happen from the start. LAMCO did that, and we will make sure that it is part and parcel of the railroad operation. It's part of our social license to operate. If people see lots of trains going through nearby, if they feel that it's not just the rich foreign company's train, but a train track that they can also use, it changes the spirit and it can have some massive economic and development benefits.