LIBERIA: The Danger of Western Cluster Trucking Iron Ore from Bomi to the Freeport of Monrovia
By: Roland Perry | email@example.com
June 8, 2022 Western Cluster Liberia (WCL) broke grounds to begin iron ore mining in Bomi Hill, Bomi County. The project is a 25-year Mineral Development Agreement (MDA) signed between the Government of Liberia and the company in 2011.
The WCL project consists of three iron ore deposits. They are the Bomi Hill mine in Bomi County, the Mano River, and the Bea Mountains in Grand Cape Mount County.
However, a lack of transparency and accountability characterized the contract’s bidding process. Liberian government officials and legislature members were accused of taking bribes to award the iron ore deposits to Elinelto, a shadow company with no mining experience.
Immediately after ratifying the deal, Elenilto sold 51% of its share to Sesa Goa, a Vedanta PLC subsidiary, earning US$90 million. Sesa Goa later purchased Elenilto’s remaining stake in the WCL project for $33 million.
The Ebola outbreak in Liberia in 2014 and low iron ore price prevented the company from beginning the project. The situation led to WCL temporarily deserting the project in anticipation of a better market price.
The agreement provides that WCL pays US$2.8m annually in social development funds to the affected counties (Bomi, Cape Mount, and Gbarpolu). It also requires the company to pay government taxes and royalties and rebuild the railroad, among others.
GoL and WCL signed MOU.
On June 4, 2022, Senator Edwin M. Snow of Bomi County announced that the Government of Liberia and WCL signed an MOU for the commencement of the iron ore project.
In a citizens’ meeting in Tubmanburg, Bomi County, Snow declared, “the Liberian government has wave US$10M of US$20M in taxes owed by Western Cluster.
He noted, “the Liberian government will grant WCL a Class A mining license and a road user permit to pave the way for the start of the project.”
Snow said, “WCL will also make an upfront payment of US$5M in taxes owed the government and US$4.5M to rehabilitate the Monrovia-Tubmanburg highway.”
At the groundbreaking, the Chief Executive Officer of WCL, Sujal Shah, said he is glad his company is doing business with Liberia. He noted that he is optimistic that the project will make an “enviable impact” on the country. He highlighted that the ‘commencement of the project is a dream for his company.’
How will WCL transport the ore for shipment?
According to Senator Snow, WCL intends to ship two million tons of iron ore in the first year.
He urged citizens of Bomi County to set a suitable time, preferably at night, to allow the WCL to truck the ore to the port of Monrovia. Transporting the ore will require hundreds of trucks and earth-moving equipment to achieve this goal. This exercise could lead to traffic restrictions, put motorists at risk, and create environmental danger.
Environmental and Social Impact
Section 6.7 (b) of the MDA requires Western Cluster Liberia to construct and rehabilitate roads and bridges, to facilitate the company’s operations. The MDA also mandates WCL to conduct a “feasibility study” to ascertain the environmental impact of trucking the ore. Regrettably, no feasibility study has been undertaken.
According to the New Jersey Department of Health, “Iron Oxide can affect you when inhaled. Exposure to Iron Oxide fumes can cause metal fume fever. It is a flu-like illness with symptoms of metallic taste, fever, chills, aches, chest tightness, and cough. Prolonged or repeated contact can discolor the eyes causing permanent Iron staining.” Other studies have proven that the prolonged inhaling of iron oxide fumes can cause lung disease in humans.
Benefits to the affected counties
According to Senator Snow, WCL pays US$2.8m annually to the affected counties and citizens of the affected counties would first get employment preference. The company will also procure local services and provide financial and technical assistance to the Bomi County Community college, he noted.
However, there are fears the government could misappropriate funds received on behalf of the affected counties.
In 2013, the Liberian government refused to remit US$400k paid by WCL to Grand Cape Mount County but stated that the “money lapsed,” for instance.
Similar situations also affect the ArcelorMittal Liberia (AML) social development fund. Annually, the government receives US$3m from AML for the people of Nimba, Grand Bassa, and Bong Counties.
Contrary to the MDA, the government often misappropriates and spends the amount on off-budget projects.
WCL to give US45M for road rehabilitation
According to Senator Snow, WCL will give the government US$45 for road rehabilitation. Already, the Monrovia-Tubmanburg highway is deplorable and needs urgent rehabilitation work.
Many are doubtful that the government will adequately implement the road project. The distrust comes from the recent misappropriation of over US$7m from the road funds. According to a General Auditing Commission audit, the government spent the amount to pay salaries in violation of the Road Fund Act.
Why is Snow pushing the WCL Deal?
Since the return of WCL, Senator Snow has been making frantic efforts to help the company starts the project. He has outlined that his ‘primary interest is creating jobs for the people of Bomi County.’ However, Liberians are concerned about his push for the project. Snow is notoriously noted for putting his interest above the people’s interest. For example, Snow is one of those responsible for the premature departure of the Sime Darby Plantation from Liberia. He violated section 5.4 of the company’s concession agreement by creating a palm plantation a few kilometers from Sime Darby’s plantation.
Besides, Snow is also known for trying to secretly enter an illegal oil deal with Gazprom, a Russian company to drill oil in Liberia’s basins in 2013. Unfortunately for him, former President Ellen Johnson Sirleaf refused his proposal. Therefore, we urge the government, civil society, and the media to scrutinize his (snow’s) interest in the WCL deal to ensure he does not reap personal benefits to the detriment of the people.
Can the govt. be trusted to manage funds from the WCL Project?
The current wave of corruption, misappropriation, waste, abuse, and off-budget spending by the Weah-led administration, makes it unclear that the government can transparently manage funds generated from the WCL project.
Since his ascendency, President George Weah continues to use public resources on vanity projects. As we gravitate toward the 2023 general and presidential elections, citizens are afraid that the president and his officials will squander funds generated from the WCL project to perpetuate them in office.
In conclusion, we do not believe that the trucking of the ore is in the Liberian people’s best interest. Our contention with the WCL deal has always been the lack of transparency and accountability.
Trucking the ore through densely populated communities could lead to pollution and environmental catastrophes. The presence of several trucks on the highway could result in crashes and, eventually, the loss of lives. Iron Oxide fumes could circulate on the street and into people’s homes, causing pollution and illness.
Urging citizens to avoid using the Bomi-Monrovia corridor at night limits their freedom/rights to travel, not to mention restricting the transportation of goods and services from other counties and the Republic of Sierra Leone. Recommendation
Fellow Liberians, our ultimate goal is to protect the rights, safety, and health of the citizens. Nevertheless, if the government insists on allowing the trucking of the iron ore, they must consider the following recommendations to help address some of the concerns raised:
- The Ministry of Public Works must inspect all culverts and bridges along the road to determine their structural integrity/load-bearing capacity.
- Public Works should ensure that the road rehabilitation/upgrading is done to recognized international or ECOWAS axle load standards and that traffic signs are installed to communicate with road users.
- Construct a dedicated lane for trucks and other heavy-duty vehicles.
- The government should install street lights along the highway to give users visibility at night.
- Government should compensate owners of properties for any damage sustained.
- Before granting Western Cluster a Class-A Mining License, the company must conduct the required feasibility study, including Port & materials handling, rail, roads, and mine infrastructures.
- WCL should provide the government with a comprehensive plan for the Mine Development, engineering, procurement, and construction phases – especially when they intend to begin the railway construction.
- Social Development funds are deposited into counties’ accounts immediately upon receipt.
- No iron ore is trucked until rehabilitation/upgrading works on the road are completed
- Engage an independent consultant to monitor and evaluate the project and ensure value for money is achieved.
If the government failed to implement the western cluster project in line with international best practices could lead to a disaster and add more suffering to the Liberian people. I urge citizens of the affected counties, civil society, university students, and political leaders to ensure that the government and the company perform due diligence in the execution of the project.