An opinion by Samuel P. Jackson Sustainable Development Consultant
Building a new railroad and port to ferry Guinean iron ore through Liberia has long been a promising alternative to taking Guinean ore to Conakry. A truly mouth watering economic prospect for Liberia. Conakry is more than 700 kilometers from the Nimba Mountain range and only 300 kilometers from the Guinean deposit to Buchanan. Building a railway to Conakry would pass over mountainous regions and valleys and destroy environmentally protected areas.
So what has obstructed building of the rail for generations? Politics. Intrigue. War. Selfish interests and plain stupidity. Why would two mineral rich countries give out huge deposits of the highest grade ore to foreign companies to own, exploit and profit while their citizens mire in abject poverty eludes my small brain but that’s the current thinking of our people.
Robert Frieland and his buddies are not doing anything magical or miraculous. They get rights to an asset, raise funds and buy expertise. A simple concept yet it eludes the thinking of my own people.
HPX does not have 5 billion dollars cash on its balance sheet to fund a project of that magnitude but they have two ingredients we don’t. Trust from investors and great support from the United States Government. HPX signed a commercial advocacy. agreement with the U.S. Department of Commerce in late 2022 or early 2023 to fight for access to the rail currently being used by Arcelor Mittal to ferry iron ore from Yekepa to Buchanan. But Arcelor Mittal refused saying it had several years left on its 25 year concession agreement signed with the Government of Liberia in 2006.
So fight for control of the rail has been ongoing now for at least 3 years with all efforts to resolve the matter amicably between the parties bearing no fruits. The stalemate angered Washington believing that Arcelor Mittal was being intransigent because it had the support of Liberian government officials. Some believe visa restrictions on officials may have their origins in the stalemate.
Therefore a high profile announcement of a letter of intent by the Boakai administration and Robert Frieland just two weeks into the new government indicates a new strategic direction. Closer cooperation with Frieland and HPX and a win win for the corporate parties including Arcelor Mittal which gets the railroad all to itself. But how does Liberia benefit?
This is where the cautionary tale begins. Iron ore no matter the grade has a finite life as a non renewable resource. Mt. Nimba in Guinea reportedly has 2 billon tons. All are not mineable. So even if mining begins it might not last beyond 40 years. We will get royalties and a rail infrastructure and port. Train drivers and menial laborers under the current mining structure in Liberia. Arcelor Mittal and the mining companies are not creating skilled Liberian workers with transferable skills. Poverty persists in Nimba County despite 18 years of association with Arcelor Mittal. Container housing. Limited linkages to the Liberian economy. Same for Bea Mountain and MNG gold.
We heard this song before. The vaunted 17 billion dollar investment from the UP government. Now 5 billion dollars is been bandied around here as a mark of critical success of the new administration. Baloney as we say in Brooklyn. First of all the announcement says 3 to 5 billion dollars. How much of that in sunken costs to be applied directly to Liberia and pass through effects to the Liberian economy? Income to Liberian owned companies? GDP? Socioeconomic development? Sustainable growth? Environmental and social impact? All of these should be gleaned from a comprehensive feasibility study. A few years away. Actual Enigineering, Procurement, Management and Construction (EPMC) costs? Linkages to the Liberian economy? Skills training and development?
Frieland is a businessman and the profit motive is his calling. I cannot begrudge him. I wish him well but I would expect my Government that claims it came to rescue our people to answer some fundamental questions? How does Liberia benefit? What’s the guarantee that we don’t suffer the affliction of rich land poor country when the ore is gone 40 years from now? And so it goes.