The Management of Arcelor Mittal -Liberia has objected to the recent concession agreement between the Government of Liberia and Prista Port, and threatening not to proceed with phase two of its proposed investment plan unless the prevailing situation is addressed by the Government of Liberia appropriately and satisfactorily.
“The importance of this matter is such that AML cannot proceed with its phase two investment proposal that is underway unless or until the situation can be corrected,” AML said in a letter.
In the Letter of Objection sent to the Ministry of State on December 12, 2019, AML expressed its total objection to the concession agreement, because it accordingly overlaps greater portion of the current concession area under the control of Arcelor Mittal Liberia in Buchanan, Grand Bassa County.
The letter, signed by the Chief Executive Officer, Scott Lowe, said: “We have been advised that some initial agreements have been executed.
“Of critical importance is that it awards the Iron ore port and most of the associates facilities currently under Mittal’s control to Prista Port,” the letter said.
“This undermines and creates uncertainty regarding the security and tenures of Arcelor Mittal in business and future investment,” it added.
The letter also indicates that recently, representatives of Prista Port approached Arcelor Mittal in London and said that their concession would come into effect and would eventually replace Arcelor Mittal as a concessionaire.
“We reject this assertion of Prista Port and maintain that no valid concession can ever be granted that overlaps AML’s concession areas,” AML’s letter said.
“The company requires absolute certainty that its concession and permit are in good standing as an essential component of its business case for investment and cannot consider an investment where security of tenure is in dispute or at risk.”
The company is also demanding a written communication from the government, confirming that the government has not or will not ratify any concession agreement with Prista Port and secondly, will not grant any concession that overlaps or in any way reduces AML concession areas while it remains valid.
The detail of this controversial concession agreement between Prista Port and the Government of Liberia is still unknown, but in the opening statement of the letter, AML said Prista Port and the government through the National Port Authority entered into an agreement, but could not specify the date or role of Prista Port Buchanan LLC.
Arcelor Mittal began shipping ore in 2011, under a Mineral Development Agreement (MDA) that authorizeS it (Mittal) to use all facilities left by LAMCO, including the estates in both Yekepa and Buchanan.
The railroad and the Port of Buchanan were left to be rented by Arcelor Mittal.
Besides the 4% royalty that goes to the Government of Liberia, Arcelor Mittal is under obligation to provide US$3 million annually for social development to Nimba, Bong and Grand Bassa Counties within the 25-year operational period. AML is also to construct, maintain and operate health facilities in the Concession Area with modern equipment and with procedures with accepted international standards, and provide training for Liberian citizens for skilled, technical, administrative and managerial positions.
The pavement of road linking Ganta and Yekepa promised by Mittal is yet to be completed.
Currently, Mittal is mining a virgin mountain known as Gangra in line with the 25-year agreement. Citizens in Nimba County, where US$1.5 million of the social development fund goes, cannot vividly account whether or not this money has been coming as most of the affected communities in the mining area virtually remain in an impoverished condition.