Business: HPX’s Desperation Exposed: Why Liberia Must Resist Pressure to Rush into a Flawed Agreement
Liberia-In recent developments, High Power Exploration (HPX), through its affiliate, the Liberia Economy, has attempted to cast the Liberian government as the principal obstacle to finalizing a multi-user rail access agreement that would facilitate the transshipment of Guinean iron ore through Liberia’s Buchanan Port. However, a closer examination reveals that HPX’s own missteps and the shifting geopolitical landscape in Guinea are the real culprits behind the company’s mounting unease. This article seeks to expose the inconsistencies in HPX’s narrative and underscore why Liberia must resist any undue pressure to hastily enter into an agreement that could compromise its national interests.
A Questionable Partnership
Earlier this year, HPX and Guma Group announced a $5 billion collaboration to construct the Liberty Rail Corridor, a new multi-user infrastructure linking Guinea and Liberia. The ambitious plan, which gained some traction when Liberia’s Ministry of Finance and Development Planning announced that the African Development Bank was raising funds for the project, initially seemed like a promising venture. However, the recent publication on the Liberia Economy website—HPX’s alleged mouthpiece—indicating an open warning to the Government of Liberia raises serious questions about the company’s intentions. Why is HPX still aggressively pursuing access to Liberia’s existing railway when it should be focusing on constructing the Liberty Corridor as part of its $5 billion project?
This contradiction suggests that HPX may be overreaching or, worse, using Liberia as a fallback plan while it struggles to secure traction in Guinea. The company’s desperation becomes even more apparent when considering the geopolitical shifts in Guinea, which have not only complicated HPX’s position but also rendered its pursuit of Liberian rail infrastructure increasingly precarious.
Guinea’s Geopolitical Shift
The latest story by the Liberia Economy inadvertently reveals HPX’s desperation. A paragraph in the article reads, “The delays have also drawn criticism from the Guinean government, which has formally requested HPX to join the Trans Guinean Rail (TGR) project for exporting iron ore. The Guinean Ministry of Mines and Geology has made it clear that it no longer supports exporting iron ore through Liberia due to the ongoing delays, further complicating Liberia’s position.”
HPX’s attempt to shift the blame for its setbacks onto the Liberian government fails to account for the significant changes in Guinea’s political and economic landscape. Since the military junta took power in Guinea, the government has taken a firm stance on controlling the management of its natural resources, aiming to ensure that Guinea reaps the full benefits of its assets. This posture has manifested in the junta’s insistence on signing a framework agreement with Rio Tinto and Winning Consortium Simandou (WCS) to continue the development of the Simandou iron-ore deposit. This agreement includes a $15 billion investment for the construction of a 670km railway from Beyla to Forécariah and a deep-water port at Moribayah, Forécariah.
The railway, expected to be completed by December 2024, will be available to all companies operating in Guinea, thus maintaining national control over the country’s resources. This asymmetry shift undermines HPX’s claims about a supposed framework agreement and a detailed timetable for negotiations in Liberia. The reality is that the Guinean government’s new direction no longer aligns with the initial transshipment agreement between Liberia and Guinea.
The Government has always shown commitment to implementing the transshipment agreement with Guinea; however, careful not to sabotage existing local arrangements with far-reaching effects on the country’s economic future.
HPX’s Missteps in Liberia
Under the administration of former President George Weah, HPX did submit a draft Access and Concession Agreement to the Liberian government, seeking rights to use Liberia’s rail and port infrastructure from Yekepa to Buchanan. However, this agreement couldn’t be ratified due to existing agreement with ArcelorMittal which requires that ArcelorMittal be consulted and part of any arrangement for a third part use, since the railway was restored by them. Despite this, HPX disbursed $34 million to officials within the Weah administration—a questionable transaction that has never been fully accounted for. This raises serious concerns about corruption and the integrity of any deals HPX is currently pushing.
Today, HPX is once again attempting to entice the Liberian government by offering to pre-fund the establishment of a National Railway Authority (NRA). On the surface, this might seem like a generous offer, but in reality, it is a dangerous gambit designed to lure the government into an expensive, potentially illegal venture that would primarily serve HPX’s interests. The Liberian government is already grappling with an enormous wage bill, and adding the financial burden of a new regulatory authority could be detrimental to the country’s finances, especially given the imminent completion of Guinea’s $15 billion Trans Guinean Railways infrastructure.
The Real Pressure on HPX
HPX’s veiled threat to consider alternative export routes through Guinea is telling. The reality is that the vicinity of HPX’s mines in Guinea leaves them with limited options—either through Liberia or the use of the Guinea Trans Guinean Railway. Indications suggest that the Guinean authorities have not been pressuring HPX due to its lack of progress on its mining project. Instead, it is more likely that the initial intention to tranship through Liberia no longer aligns with Guinea’s current leadership aspirations.
The Guinean Ministry of Mines and Geology has been clear in its stance against exporting iron ore through Liberia, further isolating HPX and limiting its options. The pressure on HPX is thus not from any alleged delays on the part of the Liberian government but from the changing dynamics in Guinea. This is the real reason behind HPX’s growing desperation.
Liberia’s Sovereignty at Stake
It is crucial for Liberia to recognize that HPX’s desperation stems from its failure to deliver on its promises in Guinea. The company is now trying to strong-arm the Liberian government into quickly establishing and operationalizing the National Railway Authority to fulfill its own needs, without considering the significant pressure Liberia faces in managing its finances and delivering essential services to its citizens.
The Liberian government must be vigilant in assessing HPX’s proposals and avoid being drawn into agreements that could have long-term negative consequences for the country. The last thing Liberia needs is a repeat of the HPX debacle, where over $34 million was handed over to the Weah administration without any legal backing. Such actions only serve to undermine Liberia’s reputation and economic stability.
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