US$2.7Bn Iron Ore Project in Guinea to Benefit Liberia

Mr. Robert Friedland (pictured) has found and developed some of the largest, most prominent mines across the world.

500 jobs and US$600M infrastructure investments planned for Liberia

One of the world’s leading global investors in Iron Ore is looking to invest in Liberia in a major way, through the use of the rail linking Yekepa and the Buchanan Port to transport 30 million tons of ore per year from its Nimba Mountain Project in Guinea.

  In a November 11th press release, by High Power Exploration (HPX), the company plans to commence with construction in 2023.  HPX is a privately-owned, U.S.-domiciled mineral exploration and development company with an 85% ownership interest in the Nimba Mountain Project in Guinea which is being developed by its Guinean subsidiary, Société des Mines de Fer de Guinée (SMFG). 

The Company has also opened its Liberia subsidiary, Ivanhoe Liberia Ltd., to oversee the implementation of its Liberia investments and operations, which includes planned construction and infrastructure works in the port of Buchanan and any shared expenses associated with the expansion and maintenance of the rail connecting Yekepa to the port of Buchanan.  The company is currently in ongoing negotiations with the Government of Liberia towards a final conclusion of its Liberia investment strategy.  

“HPX is a well-funded U.S. incorporated company, founded by Robert Friedland and Ivanhoe Capital Corporation.  Over his multi-decade career, Mr. Friedland has found and developed some of the largest, most prominent mines across the world. He is currently Executive Co-Chairman of Ivanhoe Mines Ltd., which has recently brought into commercial production the ultra-high-grade Kamoa-Kakula copper deposit in the Democratic Republic of Congo, which is ranked today as the world’s fourth largest copper deposit,” according to news wires.  

In 2019, the Government of Liberia entered into a Bilateral Agreement with the Government of Guinea for the transshipment of ore through Liberia, and HPX has subsequently received a provisional “right of access” to the rail, subject to final negotiated agreements with the Government of Liberia.  These positive developments have allowed the company to proceed with its ongoing plans for investing in Liberia for the the realization of its overall $2.7 billion iron ore investment project while discussions are ongoing. 

This should come as welcome news to the People of Liberia, that a major U.S. investor is mobilizing to invest as much as $600 million in direct foreign investment in Liberia, not including the additional user fees to be paid into Government coffers for use of the rail infrastructure.  All of this is happening at a time when the nation’s economy continues to suffer from slow economic growth, high unemployment, local currency depreciation and other economic woes. 

The project has already received political risk insurance from the Multilateral Investment Guarantee Agency (MIGA) of the World Bank Group, and investors have already raised over $200 million in equity capital to fast-track the investment.

In the recent press release, in which the Company announced the promising results from its Pre- Feasibility Study (PFS) for commencement of construction in 2023, the Study confirms the commercial viability of developing Nimba’s world class high-grade, low impurity, direct shipping ore deposit, stating that the 2021 PFS was led by independent engineering firm Hatch Ltd of Toronto, Canada and evaluated the development of a mine, rail and port infrastructure to export up to 30 million tonnes per annum (Mtpa) of direct shipping ore via rail from the Nimba project site in Guinea through Liberia to the Buchanan Port. The Hatch led team included SRK Consulting (UK) Limited, Fluor Corporation, Golder Associates, China Harbour Engineering Company Limited, China Railway Liuyuan Group Co. Ltd and CCCC First Harbour Consultants Co. Ltd.”

It further confirms that the total project development costs are estimated at US$2.77 billion (including direct capital costs plus all engineering, owners cost, contingencies and taxes, and the direct capital costs for rail and port development in Liberia is estimated at more than US$600 million.”   

Commenting for his part, Mr. Guy de Selliers, Chairman of both HPX subsidiary companies SMFG and Ivanhoe Liberia Ltd., stated, The Nimba Iron Ore deposit is renowned for its very high grade, as well as for its proximity to existing infrastructure. Bringing the Project’s high grade, low impurity iron ore to global markets craving this type of ore to make steel that has a lower carbon footprint, which is now being demanded, will require access to the Liberian transport infrastructure. We are confident that satisfactory agreements for this purpose will be reached with the Government of Liberia, who are fully aware of the massive benefits of this project for the people of Liberia, and which will help develop this part of West Africa into a significant iron ore producing area for the benefit of local and regional stakeholders across both Guinea and Liberia.”

Responding to the Press Release, Hon. Gesler Murray, the Minister of Mines, told Reuters News Agency that,talks were going on with ArcelorMittal about usage rights for the railroad, the final agreement of another party using it is being finalized, [and] we think it will benefit everyone.”   This would be consistent with recent comments by the Deputy Speaker of the House of Representatives, Grand Kru County District #2 Representative, J. Fornati Koffa, in which he expressed that the Government should deliberate carefully when it comes to negotiating sovereign assets and existing infrastructure in Mineral Development Agreements (MDAs) before the National Legislature.