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Editorial

In Sympathy with Mittal Steel, But….

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Mineral development agreements are made in the interest of the socio-economic development of a nation and its people.

But in Liberia, it may be the other way around – wherein only a few and not the majority benefits from such arrangements.
For some years now, so-called investors/companies entering into mineral developments with Liberia continue to either fold-up, threaten to close down or complain of various problems to the detriments of ordinary employees, the environments in which they operate and the nation’s progress and development as a whole.

Before then it was China Union – an iron ore mining company operating in Bong Mines in the western part of Bong County in Central Liberia, complaining of financial melt-down due to the market value of the ore on the world market; as a result, the company threatened to either shut down or lay off several employees.

Of most recent, it is the global steel giant – Mittal Steel, currently engaged in mining operations in the country’s Northern Nimba County in Yekepa, high up in the mountains (Tokadeh) of northeastern Liberia.

The company, which signed a 25 year Mineral development agreement with the Government of Liberia, has announced publicly that it would lay off four hundred and fifty of its workforce by January of 2016 due to the drop in price of iron ore on the world market – the same reason as announced a few months ago by China Union.

The foregoing decision, according to the Mittl Steel, is just part of a number of measures to cut cost and enable the company continues its operation here.
“From January 2016 Arcelor Mittal Liberia will implement a new operating model with a more flexible cost base. This involves operating during the dry season only and selling 3MT of DSO to the European market only.

As part of the cost reduction measures, we have informed the local union today of our intention to reduce employment by up to 450 jobs. The jobs affected will principally be related to the support infrastructure and operation, as well as some contractor jobs. The size of the reduction is dependent on the outcome of our negotiations with the union on changes to employment practices and the cost base of the operation. Potential measures under discussion include salary reductions, changing working patterns and agreements, and multi-skilling our employees. If we reach agreement with the union to implement some of these measures, the number of job losses would be lower,” a statement quoting the Chief Executive Officer of Mittal Steel as saying, further assuring that negotiations with the company’s workers union will continue and any action taken will fully conform with the Liberian labor law and its wider obligations to employees of Arcelor Mittal and other stakeholders.

Like China Union, Arcelor Mittal may simply be suggesting to the people of Liberia that since its inception, it has had no adjustable economic strategies in place in countries that it operates to make up for a fall in the price of iron ore on the world market.

Moreover, it is even unfortunate and frustrating that with all of the financial experts/economists, the Liberian Government would choose to enter into such mineral development agreements without enshrining fall-back strategies/mechanisms should there be any price reduction of the mineral on the world market.

Just as China Union and Arcelor Mittal Liberia, it is no secret that Firestone Liberia has, for a while, been experiencing similar situation with the price of rubber on the world market. But the company may have put in place, in collaboration with previous governments, sustainability strategies wherein there will be stability in the event of any drop in the price of rubber on the global market, as it is currently. As a result, Firestone continues to maintain the highest degree of stability at all levels of its operations, including its workforce.

Whether or not companies operating in Liberia network against this backdrop, the current trends of events at China Union and Mittal Steel only expose the reality.
If and only if the Government of Liberia – the Executive and Legislative Branches, would exercise the highest degree of patience and national consciousness in the crafting, signing and ratification of mineral development agreements void of any other interest(s), many of these economic challenges (including staff reduction) confronting companies operating in Liberia, including China Union and Mittal Steel would be avoided.

 

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