Posted December 29, 2006
Liberia finally signs deal with mittal steel
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.
Source: Reuters
