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MONROVIA (Reuters) - Liberia has signed a revised mining development deal
with the world's largest steelmaker Arcelor Mittal after agreeing on concessions
which protect its national interest, President Ellen Johnson-Sirleaf said.
"We are most pleased to report that after a long session of negotiations in New
York ... the Mittal Steel agreement was signed today," Johnson-Sirleaf told a
news conference in the Liberian capital Monrovia on Thursday.
"There were major concessions made and we believe that the national interest has
now been protected ... Mittal Steel can start its operations," she said.
Local company officials had no immediate comment.
Liberia said in October it wanted to revise parts of the 25-year iron-ore
concession granted in 2005 to Mittal Steel -- now called Arcelor Mittal -- by
the previous, unelected government.
The key sticking point in the $900 million deal had been control of Liberia's
main port of Buchanan and a railway line, which had been awarded to the
steelmaker, founded by Indian-born billionaire Lakshmi Mittal.
Liberia's government would then have had to pay the company, whose annual sales
last year were worth 10 times Liberia's gross domestic product, to use the
assets.
Corporate governance campaign group Global Witness said in an October report
that Mittal had exploited a legal void in war-torn Liberia to snap up the
country's enormous iron reserves and dispossess local communities of land.
INVESTOR CONFIDENCE
The major deal was hailed as a sign of investor confidence in the West African
state after a 1989-2003 on-off civil war shattered its infrastructure and killed
some 250,000 people.
But Johnson-Sirleaf, a Harvard-trained economist who took office in January
after the country's first post-war elections, disagreed with clauses in the
agreement signed by the unelected interim government installed as part of a
peace deal.
Her government had also raised questions about clauses in the agreement relating
to pricing and royalties. The original deal allowed Mittal to establish prices
for iron ore, thereby setting its own royalty tax payments.
Arcelor Mittal said earlier this month it was ready to go ahead with its mining
development deal, which it said would bring Liberia over $1 billion of
investment and create 3,500 direct jobs.
The deal is expected to boost the company's iron ore production by 15 million
tonnes a year. Before the war, Liberia was the world's fifth largest producer of
iron ore.
Johnson-Sirleaf said Mittal's operations in Liberia -- which have continued
during the negotiations, albeit at a slow pace -- would accelerate once the
revised deal had been ratified by parliament. |
More about Iron
Ore investments
Mittal Steel Finally Gets Green Light
The Inquirer December 29, 2006
Mittal Steel Takes Giant Leap
The Analyst December 29, 2006 |