LIBERIA: Weah’s Executive Order on National Authority Could Put Substantial Foreign Investment In Danger 

On Monday October 19, 2022, President Weah issued Executive Order No. 112 which would see the establishment of a new institution to manage Liberia’s railway, with particular emphasis on the Buchanan – Yekepa railway currently operated by ArcelorMittal.

According to the Executive Order, the National Railway Authority would perform administrative function over Liberia’s railway infrastructure.

As good as this could sound, the executive order also comes with a chaotic confusion with respect to the rights of ArcelorMittal under the Mineral Development Agreement of 2007 which was amended in 2013.

In this MDA, the government of Liberia awarded exclusive right to AML to use and manage the railway amidst AML’s investment of US$500 investment in the infrastructure and Buchanan port. The MDA also states that no other user shall use said infrastructure except by the consent of the company.

To have setup a new government authority without the confirmation of the company which was legally awarded the right to operate and manage the railway runs contrary to the government own mineral development agreement with ArcelorMittal.

How could the government announce such decision without making some form of amendment to the AML current Mineral Development Agreement or to have even acted on the passage of the 3rd MDA in which all parties agreed to a multi-user arrangement?

In all her dealings, AML has not opposed the usage of the railway by other parties even though it is ArcelorMittal who invested more than $500 million into the railway between Yekepa and Buchanan.

Despite the government’s interest in bringing additional users to the railway, and considering AML desire to expand, the company agreed to a multi-suer arrangement in its 3rd mineral development agreement which paved the way for additionally users access the rail.

Sadly, this deal was rejected by the House of Representatives as “monopolistic” of Liberian infrastructure.

Finance Minister Samuel Tweah even made this position of AML’s exclusive right clear in an interview with a team of Journalists at ELBC on March 10, 2022.

Tweah said it was crucial, according to him for the Legislature to pass the 3rd Mineral Development Agreement for ArcelorMittal agreement so that ArcelorMittal can expand its mining operations by building a massive processing plant in Nimba which will require an enormous power supply from the CLSG line and help the government shoulder energy cost.

It was at this very interview that the Minister of Finance explained that for the next 9 years, no other company will be able to use the Buchanan- Yekepa railway if the legislature fails to pass the ArcelorMittal MDA before it; arguing that the agreement was well negotiated by some of the best experts in the sector.

Said Minister Tweah: “ArcelorMittal has exclusive right over the rail in the current agreement, and for the next nine years, no one else will be able to use it”. He continued, “For the government to bring anyone else to us rail according to the current agreement, ArcelorMittal has to agree.

Even though there is no confirmation by the company on the new executive order to establish the National Railway Authority to bring in new users, it could become an unnecessary burden were company to take legal action against the government for bridge of its rights under the MDA.

Clearly, this decision is danger and risky. We are aware that no ideal investor has come to Liberia in the last five years to match up to even 10 percent of AML investment.

ArcelorMital has in its ongoing phase two expansion planned an additional $200million investment to expand the capacity of the rail.

Are others like Ivanhoe Liberia Limited (‘Ivanhoe’) and Société des Mines de Fer de Guinee (‘SMFG’) which will be given access and use of the rail willing to make similar investment to expand, maintain, and operate the rail?

Visited 347 times, 1 visit(s) today

Comments are closed.