A France based magazine, Africa Intelligence is reporting that the Government of Liberia has given away the assets from mining firms by withdrawing their licenses in favor of ArcelorMittal without informing the affected companies. Solway Mining, which was about to launch its iron ore project, has lost its assets to rival Arcelor Mittal which is strengthening its grips on iron ore production and its rail line monopoly against a monumental investment from High Power Exploration (HPX).
Before launching his campaign for the second term, Liberia’s President George Weah surreptitiously endorsed the transfer of mining license to steel giant Arcelor Mittal.
After consulting confidential documents and conducting interviews with officials, Africa Intelligence indicated that it can confirm that Weah last month, September 2023, withdrew an iron ore mining licence held by Solway Mining in Nimba County and transferred it to ArcelorMittal. Solway, which is based in Zug in Switzerland, is headed by Dan Bronstein.
The transfer gives ArcelorMittal a virtual monopoly on iron ore in Liberia and jeopardises the plans of Robert Friedland’s mining group, High Power Exploration (HPX). With Washington’s support, the tycoon had hoped to transport iron from his firm’s Nimba project in neighbouring Guinea by rail for export from the Liberian port of Buchanan. But the exclusive right to use the railway line, granted to ArcelorMittal Liberia, has not been terminated by Weah, which he promised US officials and mining operators he would do.
The transfer of the mining licences has angered the US administration and further strained its relations with Weah. The Liberian president had a frosty meeting with a delegation from the US State Department in New York last week prior to his speech at the United Nations General Assembly. Michael A.
McCarthy finished his term as US ambassador to Liberia in July and his replacement, Mark Toner, is due to start work after the October elections.
Ending ArcelorMittal’s monopoly on the rail line and making it “multi-user” under an independent operator, is strategic for US interests and the development of Liberia. It was also advocated by a special presidential committee set up by Weah (AI, 25/04/23), whose confidential report, revealed by Africa Intelligence, was harsh on ArcelorMittal management.
While awaiting the arrival of his ambassador in Monrovia, Blinken has hardened his stance towards the Weah administration, announcing on 27 September new visa restrictions on Liberians involved in “underming democracy”. Washington suspects that these latest mining and financial manoeuvres are about manipulating the electoral process.
The issue is being monitored at the White House by Judd Devermont, President Joe Biden’s Africa adviser, and at the Treasury. The US Office of Foreign Assets Control (OFAC) has compiled files on political figures close to
Weah, who face a new round of sanctions for alleged corrupt practices. The most recent to be imposed by OFAC date back to August 2022 and targeted three figures accused of corruption and misappropriating public funds. One of them was Nathaniel McGill, the then all-powerful minister of state for presidential affairs.
The main targets now are Finance Minister Samuel D. Tweah Jr. and his counterpart in charge of mines and energy, Gesler E. Murray, who are unlikely to be reappointed to the next government. They are suspected of having orchestrated the licence transfers in collaboration with National Investment Commission (NIC) boss Molewuleh Gray and acting Senate speaker Albert Tugbe Chie, who is particularly influential on one fringe of the government. Justice Minister Frank Mush Dean, who signed most of the decisions favourable to ArcelorMittal, is also in the firing line.
ArcelorMittal is suspected of having dubious links with politically exposed figures, links which are said to have been strengthened during the current election campaign period. The firm denies this. US authorities are also suspicious of the ArcelorMittal employee who is in charge of relations with the Liberian government, James Kollie, who is a brother-in-law of the finance minister.
HPX has expressed displeasure about the discreet action of the Liberian Authorities against their investment interests.
In a letter to the government dated 5 September, the global steel giant was keen to formalise the transfer of the mining licences. It referred to a confidential settlement deed of 29 June, amended on 14 August, to acquire several mining assets. The letter, seen by Africa Intelligence, states that Solway Mining’s licence was withdrawn on 16 August and was transferred to ArcelorMittal two weeks later.
Solway, which was in the process of signing a mining development agreement, was not officially informed that it had lost the licence, according to our sources. The firm has already invested nearly $20m in its iron ore project located near the Yeképa site operated by ArcelorMittal in the Nimba County area bordering Guinea.
The project was due to come on stream in six to twelve months’ time and was expected to produce 10m tones of iron by 2028. The current net value of the project is around $1.8bn. Solway, provided it does not receive compensation from ArcelorMittal, is expected to turn to an arbitration court in London or New York. There it has every chance of prevailing against the state of Liberia, which could well damage the country’s image in the eyes of international investors.
HPX is particularly badly affected by this new mining situation. Its boss Robert Friedland has in recent years made several trips to the region. He has met in Conakry with junta leader Colonel Mamadi Doumbouya and in Monrovia with Weah. In 2022, he gave $37m in aid to the Liberian treasury to enable the payment of civil servants’ salaries. A framework agreement between the government and HPX was signed at that time guaranteeing the company port and rail access.
Bronwyn Barnes, the CEO of HPX, has travelled back and forth to Liberia in recent months to hold talks with the Weah administration and with the management of ArcelorMittal Liberia. She witnessed Weah’s dithering on the issue of the “multi-user” rail line and the unwavering support of certain ministers and officials for the steel giant.
With the support of the US State Department, which put pressure on ArcelorMittal and its allies in the Liberian government, HPX was counting on the end of ArcelorMittal’s monopoly on rail to connect its Nimba project in Guinea, which contains at least 750m tonnes of iron.
Several sources close to Friedland say he is furious about Weah’s manoeuvres because he was planning to try to buy Solway’s Liberian assets and was preparing to list his project in Guinea and Liberia on the New York stock exchange. The project has a current net value of more than $15bn.
Neither Solway Mining nor ArcelorMittal have responded to Africa intelligence’s enquiries. For HPX, which is hoping to be able to resume negotiations after the elections, access to the rail line appears to be compromised and its prospects unfavourable. With a maximum transport capacity of 50m tonnes of iron per year, the rail line risks being saturated by ArcelorMittal’s production alone. The Yéképa mine can produce up to 30m tonnes a year, in addition to production from Solway and other transferred
licences, such as those for the Kitoma iron ore site, formerly held by BHP Billion and now in the hands of Cavalla Resources, which is owned by Ghanaian billionaire Sam Jonah and his compatriot Angela List. The latter was informed in person by Weah, who assured her of his willingness to compensate her during his stopover in Accra on his way to attend the UN General Assembly.
Weah now finds himself under even more pressure from his US ally and from strategic investors. His unfulfilled promises to liberalise the rail line risk isolating him even further and reinforcing his dependence on a single foreign group, ArcelorMittal.