LEGISLATURE: Why It Needs to Ratify AML Deal
By: Patrick Saye Miantor
MONROVIA-The Liberian legislature has come under sharp criticism over the past years for many reasons ranging from its manner of handling of concession agreements to dealing with domestic utility work and failing to address the needs of their constituents, among others. These criticisms did not, as a matter of fact, start from the George Weah administration, rather from the era of Madam Ellen Johnson Sirleaf and even as far back from Charles Taylor’s regime.
This writer recalls when this government took office on January 22, 2018, some lawmakers made it clear to the media that they would not be called ‘rubber stamp’ lawmakers. “This legislature will be very robust in dealing with issues paramount to the interest of our people,” Clarence Moussaqoui, a representative for Lofa county said at that time.
Now, interestingly, he is not just a member on concession and investment and other committees, but a strategic and influential chairman on the former. As chairman of the committee, he and other legislators rejected the third amended Arcelor Mittal Mineral Development Agreement(MDA) citing other reasons ranging from Arcelor Mittal’s reported failure to insert a clause that calls for multi-rail and port users.
Clearly, when I read the issues pointed out by the lower house, I became concerned. But again, I knew exactly where they were speaking from and why they were coming out with these.
But let us look at a few things here: according to ArcelorMittal, it has agreed to almost all the issues raised by them, according to what I read in one of the papers recently quoting some lawmakers- Issues about housing, scholarship, hospital, road, and Corporate Social Responsibility. The Company insists it does not have monopoly of rail and that the amendments give government greater control that it did not hitherto have before.
The point of contention has been for third-party use of the rail and the port. In the MDA all these have been resolved. My reading is that it has been agreed for the port and Rail Road ownership to be for the Liberian government.
What many Liberians need to realize is HPX is not domiciled in Liberia. its place of operation is in Guinea. Solway on the other hand is mainly owned by an Estonian with a small Liberian stake in it. This begs, the question, why would a company that is resident in another country, be giving apparent greater access to the rail than a company that is domiciled in Liberia, employing, Liberians, giving Liberians opportunities, and is paying taxes. Why would they do that?
They are all clamoring for the use of the rail. I am not against the use of the rail by any third party- But let us look at this from the other side too; as one senior student of economics, Randall S. Kolubah, at the University of Liberia said: “you invest millions of dollars to construct a road only to take goods from your village to the city for the market. After some time, two people want to come to use the road at your expense. Will you allow it? Certainly not. You will need to put some charges on it so you can recover what you have spent.”
The same is with AML. Where were Solway, HPX, and the rest when LAMCO abandoned the mines? No one could come around to invest. They were all seeking for other areas to move and invest.
Now AML has invested in the mines the rail as well as the port, they are now springing up to have a share of it. I am not against them sharing it anyway, but the lies which continue to resonate that AML is refusing to share are what matters. The lawmakers need to open their eyes.
I think lawmakers need to think well in making decisions for the country. Today, Bong Mines is out, Putu no way for now, and others. How many companies are trying to invest there?
From the document I have read, ArcelorMittal maintained that the new MDA clearly spells out the multi-user rail and port infrastructure wherein the Government of Liberia continues to be the owner of the rail and port infrastructure and reserves the right as to who can utilize them. So, nowhere in the new MDA where it says AML remains the owner of the rail and port?
What Solway and HPX will offer Liberia?
Well, I did not know much about these two entitles other than some quick research and what I read about them in the Liberian media. My short say in Liberia, my research revealed that one Boima Morgan, a businessman is fronting for Solway international whose head is said to have close ties with the Russian president, Vladimir Putin. Robert Friedland, a Canadian American is the Founder, Chairman and Chief Executive Officer of High Power Exploration Inc. (“HPX”) has its operations in Guinea but only needs access to Liberia’s rail to ship.
The deal signed by HPX in Guinea, gives the Guinean government a 15% stake in the project through Euronimba subsidiary Société des Mines de Fer de Guinée (SMFG), as well as two seats on its board, according to international media
In financial terms, its estimated investment would amount to $1 billion dollars. Note that HPX investment is only increasing the tax base and creating jobs for the Guinean people, while Liberia will get only little fees on the rental services. So, one politician asked: “So that Liberia good for rental charges but not direct investment?”
For Solway, its MDA is being worked out before going to the legislature for ratification. Solway deeply relies on its head office for breath. Already, sources within the company said, several millions of dollars have been spent in Liberia to the office but not much work has been seen. This clearly suggests that a company that has not even gotten off the ground is fussing over pre-investment spending.
What AML has on the table:
It is clear that AML has a lot more to offer directly and indirectly to Liberia.
Its MDA if ratified would increase the government’s revenue through royalties, taxes, and duties, among others. Such is expected to be from around US$30-40 million annually to approximately US$75 million annually when Phase 2 is ramped up, which has to do with only the rail and port work. This s separate from the US$800m investment.
Beginning 2022 during the construction period of the mega concentrator plant and other mining infrastructures, 2000 (two thousand) new jobs will be created, especially for young Liberians. The concentrator plant and expansion will create about 1200 new skilled permanent positions for Liberians as the plant is planned to be commissioned in 2023.
With the training and development of people at the core of its operations, AML will utilize its Vocational Training Institute and its external network to train and prepare more Liberians to meet demands for the highly technical skills associated with operating complex technology such as the concentrator.
AML will further increase local procurement which will grow multi-fold with the 15mtpa expansion and support the development of local businesses and SMEs. This will create further indirect employment in the country, supporting Government’s Pro-poor Agenda.
Additionally, the expansion project – which encompasses new processing facilities, and further expansion of rail and port facilities – will be one of the largest mining projects in West Africa ramping up from the current 5 mtpa of DSO to 15 mtpa of high-value concentrate.