The new ArcelorMittal Liberia’s expansion plan is a significant move poised to help improve Liberia’s economic landscape.
As reported by multiple media outlets, the ArcelorMittal Liberia’s third mineral development agreement (MDA), if passed, will over its lifespan inject about US$1.2 billion into the Liberian economy through diverse operational and logistical means
This expansion project will boast an already US$1.7 billion, which the company has invested in Liberia to make it the largest full-scale operational foreign-direct investment (FDI) since the end of war, underlining the confidence in Liberia’s economic potential.
The 3rd mineral development agreement initiative involves the rehabilitation of crucial infrastructure, such as rail, port and mining facilities, and heralding the revival of the iron ore mining industry.
This substantial capital investment is expected to contribute significantly to the government’s revenues, with an annual increase from US$30-US$40 million to approximately US$75 million when Phase 2 of the project is fully operational.
ArcelorMittal Liberia’s expansion project is not only a milestone for the company but also positions Liberia as a major player in the global iron ore market.
The planned increase in operations to approximately 30 million tons is projected to create a substantial boost to Liberia’s Gross Domestic Product (GDP), further expanding and diversifying the national economy.
The proposed amendment to the ArcelorMittal Liberia MDA introduces a multiuser arrangement for rail and port infrastructure, ensuring that the Government of Liberia (GOL) retains ownership since 2007.
This strategic move strengthens Liberia’s bargaining power with other users, such as Guinean miners, who will now have to invest in increasing the capacity of the rail and port for their own exports.
ArcelorMittal Liberia commits to operating the rail at cost, with zero profit, benefiting all users who will only be required to pay a transit fee to the Liberian government.
A significant outcome of this expansion project is the creation of 2,000 new jobs for Liberians, with 1,200 permanent skilled positions following the commission of the concentrator. This not only addresses unemployment concerns but also marks an upsurge in investment in training Liberians in highly technical skills, fostering local talent and expertise.
Furthermore, the agreement anticipates an increase in the County Social Development Fund (CSDF) payments up to US$3.5 million annually.
The government’s commitment to directing 100% of the CSDF contribution to the three counties involved opens up immense opportunities for community development programs. Currently, 20% of the CSDF is allocated for direct community development, and this substantial increase will undoubtedly catalyze social progress and infrastructure development in these regions.
The ArcelorMittal Liberia 3rd mineral development agreement is poised to be a game-changer for Liberia’s economic growth, job creation and community development. It is imperative for the in-coming Unity Party government to swiftly resolve any outstanding issues and pass this expansion deal into law, ensuring that Liberia reaps the full benefits of this landmark agreement for years to come.