ArcelorMittal Liberia threatens legal action against the Government of Liberia due to proposed multiuser rail access for Ivanhoe Atlantic, claiming it violates their existing agreement. Meanwhile, the GOL intends to implement a multiuser rail system to enhance economic growth. A legal opinion supports the government’s actions, while AML’s historical reliance on arbitration adds complexity. The situation reflects a pivotal moment in Liberia’s economic strategy.
The situation regarding Liberia’s railway infrastructure has become contentious, as ArcelorMittal Liberia (AML) has threatened legal action against the Government of Liberia (GOL). The warning follows a proposal to grant multiuser rail access to Ivanhoe Atlantic. AML’s CEO, Michiel van der Merwe, claims that this arrangement breaches the existing Mineral Development Agreement (MDA) between the company and the government.
This conflict arises as Liberia seeks to implement Executive Order 136, establishing an independent rail operator regime, which intends to end AML’s monopoly on the Yekepa-Buchanan railway upon the expiration of the MDA in 2030. The government aims to facilitate multiple mining firms’ access to this critical infrastructure, thereby increasing potential revenue through the evacuation of iron ore from Guinea and Liberia.
In its communication to the GOL, AML argues that allowing Ivanhoe Atlantic an initial capacity of 5 million tonnes per annum (mtpa) infringes upon its operational rights. AML has invested over $3 billion in its operations and claims that the proposed access and construction of additional rail infrastructure means a violation of AML’s right of first option to expand capacity, potentially jeopardizing its long-term investments.
Moreover, AML contends that the government’s plans to transition to an independent rail operator could annul its contractual rights, disputing the legality of granting Ivanhoe access to important port facilities. The company expresses that such actions favor competing interests against their agreement.
AML’s correspondence indicates that if the government pursues the Ivanhoe deal, it will consider the act a breach of the MDA, seeking all legal remedies available. However, a GOL insider remarked that the government has the right to determine how it manages its infrastructure for national benefit. Analysts highlight that AML has historically utilized arbitration to protect its interests, which may lead to a protracted legal struggle.
The GOL is resolute in its plan for a multiuser rail system, as articulated by Minister of Mines and Energy Wilmot Paye. In a counter to AML’s claims, a legal opinion from former Minister of Justice Cllr. Frank Musah Dean clarifies that the MDA provisions allow for third-party access, asserting that the GOL is acting within its rights.
Furthermore, the National Legislature reaffirmed this stance when rejecting the renewal of AML’s MDA, supporting the government’s push towards a multiuser system which aims to optimize resource management and enhance economic growth in Liberia. Expert opinions suggest that AML’s monopoly has hindered the country’s economic potential, recommending that a multiuser model would attract substantial investments and create numerous job opportunities.
Looking ahead, the Inter-Ministerial Concessions Committee (IMCC) has initiated steps to implement the multiuser rail system, including finalizing necessary agreements and selecting an independent operator. Ivanhoe Atlantic appears committed to the transition, indicating readiness to start smaller operations before expanding.
As pressures mount, AML must now decide whether to uphold its monopoly at the risk of adverse relations with the government or to adapt to the new multiuser policy that has garnered public support. This scenario represents a critical juncture in Liberia’s economic transformation, with stakes high on both sides as negotiations continue and tensions escalate towards potential legal confrontation.
In summary, ArcelorMittal Liberia has issued a legal warning to the Government of Liberia in response to plans for multiuser access to railway infrastructure. The GOL remains committed to implementing a multiuser system that promises economic benefits for the nation, while AML argues that such actions infringe upon its existing rights. Despite AML’s threats, the government appears determined to proceed with its plans, underscoring a significant shift in Liberia’s economic strategy towards more inclusive infrastructure management. The outcome of this dispute may greatly affect Liberia’s mining sector and overall economic future.
Original Source: www.liberianobserver.com
