A French magazine is reporting that Solway Investment Group has told the Liberian president to either provide compensation after a secret deal that handed its iron ore mining licence to ArcelorMittal, or face arbitration that could cost the state $2 billion.
Africa Intelligence magazine indicated “As George Weah struggles to win a second term as Liberia’s head of state against Joseph Boakai (with a run-off between the two looking likely), a sensitive mining affair sits on his desk. The Swiss-based Solway Investment Group (SIG) and its Liberian subsidiary Solway Mining are contesting the withdrawal of their exploration licence by the government and its award to steel giant ArcelorMittal in a secret deal revealed by Africa Intelligence (AI, 06/10/23).”
The move was described as “unlawful expropriation” by the British law firm Signature Litigation, which has been instructed by SIG to ask the government to provide a framework for talks on compensation.
This is a final attempt before turning to an arbitration court, where the mining group could ask for up to $2bn, the current net value of its iron ore mining project in Nimba County in the country’s northeast.
The letter from Solway Investment Group’s advisers is addressed to Weah, as well as to his chief of staff Georges Wesseh Blamoh, his legal adviser Archibald Bernard, and his economic adviser Emanuel L. Shaw II. It was also addressed to several ministers in his previous government, including foreign minister Dee-Maxwell Saah Kemayah, justice minister Frank Musah Dean, mines minister Gesler E. Murray, and finance minister Samuel D. Tweah Jr.
The letter dated 5 October, which Africa Intelligence has seen, points out what Signature Litigation lawyers Ioannis Alexopoulos and Bernhard Maier, who are both arbitration specialists, consider to be irregularities.
Solway aims for amicable settlement
Exploration work by Solway Mining confirmed the presence of at least 1.4bn tonnes of iron in the concession. Unbeknownst to Solway Mining, the licence and all its assets were sold for one dollar with the complicity of a former local Solway manager who negotiated with the government without either party informing SIG’s head office. The firm’s assets were secretly transferred to ArcelorMittal in August, and the steel giant undertook to pay $50m into state coffers.
“At no point was Solway Mining a part of or consented to the execution of such an agreement,” the Signature Litigation lawyers wrote.
They argued that the move contravenes Liberia’s Investment Act, which states that “no enterprise shall be nationalised or expropriated by government”, and that if it is, compensation must be paid in line with the value of the assets on the international market.
Solway wants to try to reach an amicable agreement with the government in a final effort before taking the Liberian state to an arbitration court, probably in London, its lawyers wrote in the letter. They had – in vain – asked for a reply by 16 October.
Those close to Weah, who has been busy campaigning for re-election in recent weeks, are concerned about the case, which is also being closely monitored by the US administration (AI, 29/09/23). It could cost the state dear and damage its image with foreign investors.