LIBERIA: Private Sector Leader ArcelorMittal, Others Contribute 76% Extractive Sector Revenue

As the year, 2022 closed up, the government of still confronted with the critical decision of finalizing the the 1.2 billion ArcelorMittal expansion plan.

Even as the new year unfolds, the relevance of this deal is still meaningful not for employment but for the overall health of the Liberian economy.

As reported by the Liberia Extractive Industries Transparency Initiate Report of 2022, Arcelor Mittal’s exemplary leadership and relevance  in Liberia’s extractive sector was once more made visible.

According to LEITI, revenue which came from the extractive industries stood at US$84.6 million.

The report found that the government of Liberia between  July 1, 2020 to June 30, 2021, experienced a surge in revenue raised from the country’s extractive industries — covering oil and gas, mining, forestry, and agriculture sectors.

The Multi-Stakeholders Steering Group’s 14th report, which is currently the most comprehensive publicly available account disclosed a US$13.1 million surge in revenue during that period — totaling US$84.6 million from the US$71.4 million between the year 2019-2020.

This represents an increment of 18.5 percent.

Liberia’s extractive sector — comprising mining, oil and gas, forestry, and agriculture largely lead my ArcelorMittal who contributes millions in taxes, fees and royalties becomes the country’s major economic backbone.

Let us record that in 2019, the extractive industries contributed to the country’s GDP at 52%, and have been growing since and playing a key role in helping the government achieve an economic growth rate of 3.7% for 2022, as well as an anticipated average of 5.2% over 2023-24.

Revenue from the mining sector alone accounts for US$64.3 million which is 76 percent of the total extractive sector revenue— unlike US$45.2 million in the 2019/2020 fiscal year out of US$70.9 million in total revenue.

With ArcelorMittal’s pending 3rd mineral development agreement promising tremendous growth potential for the Liberian Economy, further expansion of the extractive sector is assured.

AML’s expansion project – which encompasses processing, rail and port facilities – will be one of the largest mining projects in West Africa.

The capital required to finalise the project is now expected to be approximately $1.2 billion, as it is effectively a brownfield expansion.

The expansion project 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 tonnes per annum (‘mtpa’).

Under the agreement the company will have reservation for expansion for at least up to 30mt. Other users may be allowed to invest for additional rail capacity.

Economic benefits is the AML Expansion

As the largest foreign investor in Liberia, ArcelorMittal Liberia has invested over $1.7 billion in the country over the past 15 years.

More than 2000 jobs are expected to be created during the construction phase, with Liberians envisaged to fill the majority of the roles created.

ArcelorMittal operates a Vocational Training Centre and provides two-year residential certificate training in mechanical and electrical trades.

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 optimisation, 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.

The investment in advanced skills training demonstrates ArcelorMittal Liberia’s commitment to providing employment and professional development opportunities to Liberians.

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.

The concentrator plant alone has a started producing new jobs in Yekepa and will create about 1200 permanent new skilled positions for Liberians as the plant is designed to be commissioned in 2023, even though this timeline is being seriously impacted by delay to rectify the AML 3rd amended Mineral Development Agreement.

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