Prior to the Liberian civil war, Liberia boasted of one of the most vibrant iron ore mining industries in West Africa.

But a study of the exploitation-to-benefit ratio of that industry constrained the post-war administration of President Ellen Johnson-Sirleaf to hold that the welfare of the Liberian people must determine the basis for assigning mining rights to any investor.

Now, the government seems convinced that the global mining conglomerate, Arcelor Mittal Steel, has the credentials to revamp and operate the former mines of LAMCO J.V. Operating Company in Nimba County.

The Mittal Steel Agreement signing ceremony: (L-R) NIC BossRichard Tolbert, Justice Minister Johnson-Morris, Finance Minister Dr. Sayeh, Lands, Mines & Engery Minister, Dr. Shannoh, Chair; Mittal Steel M. P. Singh, Head, Mittal Mining Department, Other Mittal officials. Photo Sando Moore

With The Analyst Staff Writer, Nathaniel Daygbor gives accounts of the signing ceremony yesterday. 

The Liberian government and Arcelor Mittal, the world’s largest steel company, have finally sealed the long-debated mining agreement first signed with the NTGL in 2005.

The sealing of the agreement at a Foreign Ministry ceremony yesterday between representatives of Arcelor Mittal and the government of Liberia ends months of negotiation and review and gives Arcelor Mittal a qualified right to operate the former mines of LAMCO J.V. Operating Company in Nimba County.

“We're most happy to report that after long session of negotiation in New York, supported by some international law firms that the Mittal Steel Agreement was signed,” Pres.Johnson-Sirleaf said at the ‘year-end’ press conference she hosted shortly after the signing ceremony.

She thanked the ministers of Planning, Finance, Justice, and Lands, Mines & Energy for working assiduously to get the agreement off the ground but noted that the agreement needed further fine-tuning to meet the needs of the nation and its people.

“We believe that national interest has not been protected,” she said. For instance, President Johnson-Sirleaf pointed out, there was the outstanding issue of the rates that will apply on the third party taxation under the Mittal Steel Agreement.

Besides, she said, there was also a part of the agreement, which regards “Double Taxation Treaty”, that needed to be carefully considered.

The Liberian leader didn't say why the issues raised were not ironed out prior to yesterday’s signing ceremony, nor did she say when the issues raised will be tackled and resolved, but noted that Arcelor Mittal Steel could begin operations once its papers were ratified by the National Legislature.

The ratification, the President said, will signify a binding treaty on the basis of which the Liberian government will demand certain taxation on operations.

In the absence of such treaty between the government and the country of origin of the company doing business in Liberia, then the country of origin will place such taxation on the company.

She did not divulge the advantages and disadvantages of the host country or country of origin imposing taxation on operation, but noted that in order to strengthen this understanding, continued dialogue between the Liberian government and Arcelor Mittal Steel was necessary.

“We've to have that ready to send it over as soon as they return from recess,” the Liberian Chief Executive noted, again without saying whether or not the contentious issues would have to be thrashed out prior to or after the ratification.

“What will happen when the issues are not thrashed out? Will yesterday’s appending of signatures be undone to make way for another round of negotiation?” is the fundamental question observers say the silence has raised.

Neither representatives of Arcelor Mittal Steel nor those of the government of Liberia appeared willing yesterday to address questions that relate to the future of the agreement including possible stumbling blocks to ratification.

“Both parties are sincere and we don't expect any hitches,” a Mittal Steel executive told The Analyst yesterday.

President seemed to concur with this view when suggested that Mittal Steel could consider stepping up pre-operation activities in demonstration of its commitment to working with the government and people of Liberia to revamp of the country’s mining industry that has been dormant for decades.

The Mittal Steel concession agreement was struck with the erstwhile National Transitional Government of Liberia (NTGL) to do mining business in Liberia at the old LAMCO facilities in Yekepa, Nimba County.

Apparently not satisfied with most concessions agreement reached by the NTGL, Liberia’s international partners called on the Sirleaf administration to cancel or renegotiate those agreements.

Against this backdrop and owing to the significance the Liberian government attaches to the creation of a vibrant private sector to spur employment, the government took keen interest in renegotiating the Mittal Steel Agreement.

“There were some strategic areas that should be controlled by government. These areas include the seaport of Buchanan, Grand Bassa County, and the railway.

All of these areas were given to Mittal Steel by the than National Transitional Government of Liberia,” President Sirleaf said, giving the background of the long session of negotiation with Mittal Steel.

She said the delay in signing the agreement was not intended to deprive Liberians of jobs but to make sure the process is transparent and have good motives.

It may be recalled some months ago, the Liberian leader told the nation that her government would do nothing to kill the agreement because it has significance to the economy.

With the signing of the agreement which was earlier postponed, observers say the government has laid the foundation for real investment to take root.   

Mr. Joseph Matarly, a spokesman of the Energy Ministry, told a disappointed horde of reporters that had gathered to report the signing, “Liberia postponed the signing of an iron ore mining contract with the world's largest steelmaker that stands to bring in over US$1billion (765 million euros) in investment in the war-ravaged state. Minister Eugene Shannon has asked me to inform you.

The program is cancelled and will be set for a later date.”

The agreement signed yesterday between the government and Mittal Steel is a revised version of an earlier deal, which Arcelor Mittal said will now involve investment exceeding US$1billion (765M euros) from about US$900M planned previously.

The first version of the deal, a 25-year concession giving the steel group access to one billion cubic metres of iron ore, was signed by Mittal Steel in August 2005 before it acquired the European steel giant Arcelor, creating the world's biggest steel group.

The Liberian government headed by Ellen Johnson-Sirleaf, elected five months after the agreement was reached, pushed for the contract to be renegotiated on better terms for the West African country, which was ravaged by civil war from 1989 to 2003.

A Lakshmi Mittal spokesman last week told AFP there had earlier been "disagreement" with Liberia over the contract, "in particular on the amount of royalties" owed.