Legislature Division Stalls  US$800 Million ArcelorMittal Investment

MONROVIA-On February 8, 2022, the Liberian Senate ratified the 3rd Amendment to the Mineral Development Agreement between the Government of Liberia and ArcelorMittal, nearly a month after the House of Representative’s controversial alterations which were passed on to the Senate for concurrence. The lower House’s amendment to the Agreement heavily altered the context and intent agreed between the executive and ArcelorMittal.

According to the secretary of the Senate, after the Senate’s passage of the agreement, they wrote the House of Representatives for a conference on the AML deal, in order to harmonize their position on the Agreement for transmission to the Executive.

The purpose of the conference according to Vice President Jewel Howard-Taylor who presided over the sitting was to bring the lower and upper houses together to resolve all of their recommendations before forwarding the agreement to the office of the president for the conclusion of the process.

In fact, on the day of the passage of the US$800 Million deal in the upper house, the Vice President in consultation with Pro-Tempore Albert Chea set up a seven members conference committee including Senator Augustine S. Chea as Chairman, Senators, Varney Sherman, Nyonblee Kargna-Lawrence, Prince Moye, Simeon Taylor, Numene Bartewka and Jeremiah Koung as members respectively, to work with their counterpart, the Lowe House, to conclude the Agreement at the Legislature level.

This meant that the Senate and the House of Representatives Joint Committees on Judiciary, Investment, Lands, Mines and Energy, Natural Resources would have long since convened in a conference committee to sort out the differences in the two agreements earlier passed by both Houses.

But strangely, according to facts gathered, the leadership of the House of Representatives has since deployed a deliberate delay tactic to stall the holding of the conference. 

Sources in the Legislature believe that members of the House, especially those chairing several influential committees have expressed displeasure that the Senate didn’t endorse their massive alterations to the mineral development agreement, and therefore, were reneging to sit around the table with them to find a common resolution. They actually wanted the senate to have gone ahead and passed on what they submitted to them.

Meanwhile, in the Liberian Senate, there is this generally held belief that the Legislature has no authority to alter an agreement sent to them for approval. Instead, they can either reject or pass.

“It is not our right under the law to change an agreement which has been entered into by the executive and a concessionaire,” said one Senate source. The source continued, “in our wisdom, we need to just make recommendations and not to change the entire agreement and insert what we want as Legislators, because it is not our role to negotiate”

“If the House sees it that way, it is up to them, for use we believe only the Executive can negotiate the terms and conditions of concessions, not the Legislature because the constitutional requirement to ratify is to serve as quality assurers to figure out if the agreement is in the country’s best interest and not to make an input” the senate source concluded.

When asked from Representative Clarence Massaquoi, Chairman of the House’s Committee on Investment and Concession, about the decision of the senate on the deal, he confirmed that the Senate has already written the House, and they have passed a version different from what we did”.

“They have also submitted names of people on their conference committee”, adding “I am sure, that communication will be read next Tuesday”.

“We have no option. It’s a matter of procedure. That is the Parliamentary procedure” replied Massaquoi when quizzed further whether or not he is willing to go for a conference with the senate.

The Government of the Republic of Liberia and ArcelorMittal (‘the Company’), the world’s leading steel company, on September 9, 2021, signed an amendment to the Mineral Development Agreement (‘MDA’) that could pave the way for the expansion of the Company’s mining and logistics operations in Liberia and allow ArcelorMittal to significantly ramp up production of premium iron ore, generating significant new jobs and wider economic benefits for Liberia.

The expansion project – which encompasses processing, rail, and port facilities – could be one of the most significant mining projects in West Africa with the capital to finalize the project expected to be approximately $8 billion, as it is effectively a brownfield expansion that includes the construction of a new concentration plant and the substantial expansion of mining operations, with the first concentrate expected in late 2023, ramping up to 15 million tons per annum (‘mtpa’).

Under the agreement, the company will have reservations for expansion for at least up to 30mt while other users may be allowed to invest in additional rail capacity.

In fulfillment of his “Liberia is open for business” pledge, is President George Manneh Weah said he was “delighted” to have reached such agreement with AML on the deal, stressing that Liberia welcomes foreign direct investment.

As the largest foreign investor in Liberia, ArcelorMittal Liberia has invested over $1.7 billion in the country over the past 15 years, promising to provide more than 2000 new jobs during the construction phase, with Liberians envisaged filling the majority of the roles created.

As part of the expansion, ArcelorMittal Liberia has also launched a training and development program for high potential Liberian employees who will gain on-the-job experience and knowledge in ArcelorMittal Mining operations globally.

The employees will receive advanced training in the fields of mining production and operation optimization, plant maintenance, planning and execution, plant electrical operation systems, and electrical maintenance. Other training areas include plant fitting and heavy-duty mobile equipment maintenance, as well as mine production and operations.

In addition, it is envisaged that the expansion will further boost the growth of small and medium-sized businesses in Liberia which offer a range of services to ArcelorMittal Liberia.

In the face of mounting economic challenges, one would have thought that the Legislature would by now act with urgency to ratify the agreement given that several youth groups and civil society organizations have petitioned the legislature to do.

Recently, Finance Minister Samuel Tweah called on the Legislature to pass the GOL – AML Agreement which is considered by many international partners, including the United States and European Union as a good deal. Tweah, said that the deal will help the government of Liberia to transform the energy sector.

Tweah said the government’s agreement with ArcelorMittal is a “significant improvement to an existing contract” that will enable the Company to contribute to the shared cost of energy when connected to the CLSG West Africa Power distribution line.

Despite the international and local support for the deal, many across the country remain head-scratching why the Legislature has repeatedly delayed in passing the agreement.

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