On 2nd Thought: Solway, Arcelor Mittal Mining War, and the media propaganda (Pt2)

*Why the other side not reporting this?

The Liberian media over the past weeks have been dominated by favorable articles in favor of Arcelor Mittal Liberia (AML), while tearing apart Solway Mining Company, one of the former’s competitors.

Some of the reports have suggested that the delay in the ratification of AML’s new MDA could sink the newly recast national budget into a shortfall-meaning, the company will not be able to remit additional taxes to government during this period.

While others appeared to be toting this narrative as a way of mounting pressure on Liberian legislature members to ratify AML’s new deal, others took on the Executive by linking Solway to Russian ties.

What these various publications are suggesting is that President George Weah’s Congress for Democratic Change (CDC) government seems to prefer a Russian Company (Solway) over a British-American interest-AML-their intent speaks volumes amid the ongoing Russia/ Ukraine war.

Some of the reports went further to question Solway’s exploration license and the president’s interest in the company when he was quoted as saying “let the Indian boy and the Liberian boy” dialogue.

But interestingly, these publications have fallen short of explaining the merits and demerits of Arcelor Mittal’s new deal and what could be hindering it.

Instead, they have targeted all their reportage at other companies seeking mining rights here, while at the same time mounting pressure on members of the Legislature to ratify AML’s third MDA.

So, what are they not reporting?

The media has failed to report that the third proposed amendment of ArcelorMittal’s MDA is not in the country’s best interest if the deal is ratified in its current state.

The proposed MDA among other things will see Mittal Steel undertaking the expansion of the railroad and the port of Buchanan in Grand Bassa County but also seeks some exclusive control to the detriment of other future users-something that could deny the government and country much-needed revenue for development and increase the pocket of the company.

For instance, the debate over the exclusive right the company seeks as it relates to its proposed expansion project will grant exclusive rights, thereby denying other users.

The ArcelorMittal MDA also seeks an ad hoc committee on controversy. On page 11 of its MDA under the User Access and Future Expansion of the Railroad Article 3. e, 8e states: 3. e“If there is a Temporary Unused Capacity and condition A to D above are met, the Concessionaire will enter into the relevant rental agreement to the effect of subparagraph 7 above.”

Subparagraph 7 on page 10 of the MDA states: “In the event the ongoing Railroad Capacity Expansion has been completed to haul 15MWMTPA of finished products, but the expansion of the Concessionaire’s mining and processing operation reach 15MWMTPA, production (including its commissioning or ramp-up) has been delayed, leading to the temporary availability of an annualized unused capacity of at least 1.5 MWMTPA on the Railroad for the following 12-months period as determined by the Concessionaire, acting reasonably and the latest forecasted progress project completion and ramp-up schedule for the mine and concentrator (the temporary Unused Capacity), the Concessionaire shall upon request and subject to the principles set out in subparagraph 9, below make available for rental such temporary Railroad unused capacity to an authorized eligible applicant using such eligible applicant’s own rolling stock, a portion of the totality of such unused Railroad capacity up to a maximum volume of 3MWMTPA, subject to conditions” listed in A, B. C. D and C.

There is no mechanism for a binding decision on this aspect of the AML MDA, meaning the decision is not binding.

AML plans to seek more rights beyond the ongoing and additional expansion as captured on page 9 of the same User Access and Future Expansion of Railroad in Article 3. e -6 2nd paragraph which states: “For the avoidance of doubt, in addition to the expansion rights set out above, the Concessionaire shall at any time have the right to apply for further Railroad expansions to meet the needs of Operations, in accordance with the Railroad System Operating Principles.”

This will give AML the right to request more capacity above 30MTPA, maxing out the capacity of the rail.

The AML deal also seeks exclusive rights that are its additional railroad capacity to reach 30MTPA with a payment of US55Million to the Government of Liberia. This is under Page 6 of User Access and Future Expansion of the Railroad. Page 6 Article 3. e.2, while page 7 Article 3. E.2B speaks of the payment and Article 3. E. 2D (i) on construction exclusion.

Engaging the press

AML has failed in its attempt to muscle the government into ratifying its new deal and has resorted to the media spew its propaganda war.

AML failed attempt is evidence by a barrage of written communications between the company and the Government as each side holds its own ground with self-interpretations of the MDA.

In its concerns addressed to the Government of Liberia on Friday 22 April 2022, AML’s parent body ArcelorMittal, says it has become aware of the existence of certain agreements that the government has sought to conclude with third parties, including licenses that it notes, the Minister of Mines and Energy has purportedly issued to third parties, which it observes that on their face, and based on the limited information presently available, gives rise to breaches of AM’s rights under the MDA.

“These apparent violations are at odds with the government’s legal obligations towards AM, and if remained undressed, risk bringing about irreparable harm to AM’s current operations and future business plan”, AML’s letter to the government read.

It notes that most importantly, these alleged breaches call into question the government’s commitment to its longstanding partnership with AM.

AM in its letter also reminded the government that it has in previous communication with the government thru its letters dated 19 June 2020 and 13 July 2020, respectively about the Solway Mining Incorporated exploration license.

AM further contends that under the MDA, it (AM) enjoys “exclusive” right to conduct exploration, development, production and marketing of “iron ore and associated products”, as well as rehabilitation of the associated infrastructure in the Concession Area, citing Article IV(1) of the MDA.

This communication prompted the government to respond thus: “Since you appear to be undeniably oblivious of our previous communications which lay clear the legal and technical premises for our decision to issue these licenses, we wish to restate that the issuance of mineral right over the former LAMCO Concession Area by the Ministry of Mines and Energy and the assertion that the affected rights fall within AML’s Concession Area was done in line with the definition of the Mineral and Mining Laws of 2000 that clearly created the platform for said discussion”, a Ministry of Mines and Energy’s letter dated 23 May 2022 to ArcelorMittal read.

This letter was issued under the signature of Minister Gesler E. Murray. Murray argues that while AML obtained assets of the former LAMCO Concession Area under the MDA of 2005 and subsequent Amendment of 2006/2007, the company did not automatically acquire any production or exploration areas for the exploration and exploitation of iron ore thereon.

The Government insists that because AML declared Production Area in 2005 and was issued a Class A Mining License over the declared area (Mts. Tokedeh, Gangra, Yuelliton) on September 1, 2005, its mineral rights over the former LAMCO Concession areas were trimmed and restricted to the Class A Mineral License area, and areas containing the assets and facilities of the former LAMCO for operation.