Liberia: GoL Warns ArcelorMittal to Stop Playing with Fire
“We wish to caution you (AML) from making unsavory comments to a sovereign country in the discharge of its rights within the comity of nations and confine yourself to your mining activities that are yet to be in full compliance.” — Mines and Energy Minister Gesler Murray
The administration of President George Weah has warned global steel giant, ArcelorMittal, that it is playing with fire by “making unsavory comments about the country” under the guise that the company’s mining rights are being violated.
The Weah administration noted that the company's claims are far from true; rather it is AML that has long been in default of certain material obligations under the mineral development agreement (MDA)/it entered with Liberia.
Acting on behalf of the government, the Minister of Mines and Energy, Gessler Murray noted that the government debunked categorically and unequivocally “all of the unsubstantiated assertions that government has violated certain terms and provisions of the MDA.”
“All actions taken by the Government of Liberia conform with relevant (laws). The Government hereby gives AML this notice, under Article XXIX Section 3 of the MDA, of the occurrence of certain matters that constitute events of default under Article XXIX Section 2(d) of the MDA. AML has, for a prolonged period, been in default of certain of its material obligations under the MDA," Min. Murray disclosed.
“Without prejudice to the Government's right to rely on a later date on other breaches of the MDA, and if the government reasonably determines that one or more of the foregoing matters cannot be resolved by further consultation, it may send a further notice terminating the consultation period relating to such matters and demanding that AML cure such breaches within 60 days or such longer period as may be reasonably required to cure the breaches.
“We wish to caution you (AML) from making unsavory comments to a sovereign country in the discharge of its rights within the comity of nations and confine yourself to your mining activities that are yet to be in full compliance," he added.
The Weah administration’s notice is in response to a recent letter from ArcelorMittal which, among other things, warned that the company will longer accept “encroachment on AM’s rights under the mineral development agreement.”
The letter, dated April 22 and addressed to the ministers Murray, Samuel Tweah, and Frank Musah Dean, called on the Government to desist from taking any further steps that may jeopardize the company’s rights under the MDA and the Liberian law generally, and should “refrain from taking any action, or facilitating HPX to take any action under the HPX Framework Agreement.”
The AML letter was also in response to the government's decision to sign an updated Framework Agreement with High Power Exploration (HPX), a company that intends to use the Yekepa to Buchanan railroad and Port of Buchanan to export ore from Guinea.
The HPX framework agreement was signed to reaffirm the government’s principles of non-discriminatory access to Liberia’s rail and port infrastructure and to identify the company’s requirements for the future evacuation of ore from the Guinean Nimba Iron Ore Project.
The company also took issue with the government’s decision to grant Solway a mining license near ArcelorMittal’s mining area.
Mittal argues that under the MDA, it enjoys an exclusive right and license to conduct exploration, development, production, and marketing of Iron Ore and associated products, as well as rehabilitation of the associated infrastructure in the Concession Area, Article IV(1).
“The Solway License is for Iron Ore and the relevant area is within AM’s Concession Area. Accordingly, it is patently clear that the issuance of the Solway License violates AM’s exclusive rights under the MDA,” AML complained.
“It is therefore of concern that AM (AML) has become aware of the existence of certain agreements that your government has sought to conclude with third parties, as well as certain licenses [issue gave] rise to breaches of AM’s rights under the MDA,” AML added. “These apparent violations are at odds with the government’s legal obligations towards AM and, if remained unaddressed, risk bringing about irreparable harm to AM’s current operations and future business plans. Most importantly, they call into question the Government’s commitment to its longstanding partnership with AM.”
But in response to AML claims, the government argues that its decisions were made in the best interest of the Liberian people to improve their socio-economic well-being under the President's flagship development framework, the Pro-Poor Agenda for Prosperity and Development (PAPD).
According to the government, while AML obtained assets of the former LAMCO Concession under the MDA of 2005 and subsequent amendment in 2007, the company did not automatically acquire any production or exploration areas for the exploration and exploitation of iron ore thereon.
It added that AML was obliged to have applied for production and exploration licenses as it desired, instead the company elected to have applied for only a production license over Mounts: Tokedeh, Gangra, and Yuelliton.
“Had AML decided to have applied for an exploration license over the tenement granted to Solway, it would not have automatically acquired it as the Public Procurement and Concessions Commission Act of 2005 demanded that all applications for exploration licenses were subjected to a bidding process,” Min. Murray argued.
“Having failed to apply for any other mineralized areas of the former LAMCO Concession other than Mounts Tokedeh, Gangra, and Yuelliton, all other mineralized areas within the Former LAMCO Concession area reverted to the Republic of Liberia, as per provisions of the Minerals and Mining Law of 2000 and the Mineral Exploration Regulations of Liberia. If AML had any right to Exploration License for the said area, that right accrued in 2005 and 2007 with the execution of the MDA and amendments thereto.
“It is important to emphasize that because AML declared a production area in 2005 and was issued a Class A Mining License over the declared area (Mts. Tokedeh, Gangra, and Yuelliton) on September 21, 2005, AML's mineral rights over the rest of the former LAMCO Concession areas were trimmed and restricted to the Class A Mining License area, and areas containing the assets and facilities of the former LAMCO area for operations,” the minister said.
The Weah administration admitted that despite AML refusing to apply for mineral exploration rights in 2005 and 2007, when the initial and amended MDA were executed, the company however laid claims to the rest of the LAMCO Concession areas when the government issued an exploration license to Mt. Bele Resources.
But the government argued that after Mt. Bele's Exploration License was subsequently terminated in 2012, AML made no further claim to the area until after another 8 years, in 2020, when the area had been issued to Solway — a claim which is unenforceable now.
“Being that the MDA and all amendments between AML and GOL are considered written instruments; Section 213 of the Civil Procedures Law of Liberia provides that such claim based on written instruments (MDAs) shall commence within seven (7) years of the time the right to relief is is accrued. Assuming without admitting that AML had rights to the mineralized areas, said rights would have been considered unenforceable,” Minister Murray noted.
“Moreover, the forest area of the land over which Solway operates has also been granted to the People of Gbarzor by the Forestry Development Authority (FDA), while the land rights have been issued to them under the Land Rights Law promulgated by GOL,” he added. “Solway has entered into binding legal agreements with the People of Gbarzor under forest management and land usage agreements, for which the People of Gbarzor have covenanted to defend their usage. Any interference with the possession of Solway will bring the People of Gbarzor into conflict on this matter.”
Regarding the HPX Agreement, the Minister of Justice, Cllr. Cllr. Frank Musah Dean has informed AML that its assertion that the mere execution of the Agreement “constitutes a serious encroachment on AM's rights under the MDA, particularly Articles IX(3)(d) and IX(3)(e) " is untrue and that agreement is fully consistent with the AML MDA with the government.
The Minister, in his legal response on behalf of the Weah administration, noted that the Government intends shortly to submit a proposal to AML relating to the expansion and modernization of the rail and port by Section 9.3(f) of the MDA and to authorize Ivanhoe Liberia to use the rail and port… expanding, under Section 9.3(e) of the MDA.”
"Specifically, the Ivanhoe Framework Agreement provides that the expansion of the rail and port capacity contemplated by the agreement and the Government's granting of access to the expanded rail and port to Ivanhoe Liberia will be undertaken by invoking the provisions of the MDA relating to the expansion of and modernization of the rail and port (Section 9.3(f)) and third-party access to the rail and port (Section 9.3(e),” Min. Dean noted.
He added: “Such use will be subject to technical and commercial terms, including terms for the operation of a multiuser rail and port system, mutually agreed, in good faith, among the Government, AML, and Ivanhoe Liberia (HPX).”
Min. Dean, on behalf of the government, also argued that the MDA with AML contemplates and supports such multi-user access under Sections 9.3(e) and 9.30, adding that the government submitted an expansion and modernization plan of the railroad and Port of Buchanan, for multi-user, something AML had earlier supported.
“When the Government first presented an expansion and modernization proposal to AM under Section 9.3(0) of the MDA in June 2020, AML responded, in a letter dated June 19, 2020, that it remained committed to the multi-user model and undertook to act cooperatively with HPX (an affiliate of Ivanhoe) to enable HPX to design and build the expanded rail and port facilities required to transport its planned volumes and to develop a workable multi-user operating model,” Min. Dean noted.