Africa Intelligence has gained access to the confidential deal which gives the global steel giant a virtual monopoly on iron ore in Liberia at the expense of Solway Mining.
A 27-page “private and confidential” deed of settlement has been ratified by the Liberian government that sets out the modalities of the withdrawal and transfer of mining licences to the benefit of ArcelorMittal. The fruit of closed door negotiations between the global steel giant and the government, it confirms ArcelorMittal’s acquisition of Solway Mining’s licence to explore for iron ore. The deed, which Africa Intelligence has obtained a copy of, also terminates the graphite mining licences of Mekinel Holdings and SRG Liberia.
The deal is being closely scrutinised by the US administration, which suspects dubious financial manoeuvres and is not ruling out the possibility of imposing sanctions on several ministers and advisers to President George Weah, who is campaigning for a second term in the election on 10 October.
ArcelorMittal’s compliance department is concerned about the risks the transaction entails and has suspended several transfers of funds to the Liberian treasury, according to our sources. The deed of settlement agreed in late June provides for the Liberian government to take “all measures required” for the transfer and withdrawal of rights granted to other companies in ArcelorMittal’s sphere of operations in Nimba County in north-eastern Liberia.
In exchange, the group run by its founder Lakshmi Mittal and his son Aditya Mittal has undertaken to pay, within ten days of recovering the Solway Mining licence, $17.5m into the government’s 2023 revenue account at the Central Bank of Liberia (CBL). When the election is over, the steel firm is then expected to credit this budget line with $37.5m. This sum falls within the framework of the ratification of the third amendment to the mining development agreement that was signed by the government and Weah in 2021 before being rejected by parliament the following year.
To date, only a first instalment of $500,000 has been paid to the government to secure the transfer of Solway Mining’s licence, according to official sources. The other payments appear to be frozen. Within the group, which is headquartered in Luxembourg, the deal concluded by the Cyprus-registered ArcelorMittal Liberia Holding and Swiss-registered ArcelorMittal Holdings AG is raising compliance concerns. When contacted by Africa Intelligence, the group declined to comment on the licence transfer but said that it “always acts with the highest levels of integrity”.
The deed of settlement stipulates that each party waives all rights to make claims or file lawsuits. It was signed for the Liberian government by Mines Minister Gesler E. Murray, Finance Minister Samuel D. Tweah Jr, and National Investment Commission head Molewuleh Gray.
All three are on the list of Liberian politicians facing possible US sanctions, according to our information. As are other senior members of the ruling Coalition for Democratic Change (CDC), whose election campaign (seemingly financed from difficult-to-trace sources) is being orchestrated by Lenn Eugene Nagbe, head of the Liberia Maritime Authority (LiMA).
In 2017, the then presidential candidate George Weah received financial and logistical support from the Russian oligarchs Andrei Bokarev, who were placed under sanctions by the US Treasury Department this September, and Nikolay Sarkisov. The latter, along with Bernard Arnault, who owns the French luxury goods conglomerate LVMH, is the subject of a preliminary investigation into money laundering made public last month by the Paris public prosecutor’s office.
Swiss-based Solway Mining is expected to challenge the agreement between ArcelorMittal and the Liberian government. We understand that its CEO Dan Bronstein was not informed by the Liberian authorities that his licence was being withdrawn and awarded to ArcelorMittal.
The US-Canadian billionaire Robert Friedland is also considering taking the case to arbitration. He is expected to instruct his lawyers, who include the law firm White & Case, to initiate proceedings if the next Liberian government does not reverse the agreement.
The deal also risks damaging relations with neighbouring Guinea. Its junta leader Colonel Mamadi Doumbouya is backing Friedland, who is developing the Nimba iron ore mine project in Guinea. With a view to exporting its future production, Friedland paid $37m to the Liberian state in 2022 to secure access to the rail line leading to the port of Buchanan.
Despite pressure from Friedland and from the United States, Weah has not put an end to ArcelorMittal’s exclusive use of the rail line, whose management has been criticised by a special committee set up by the Liberian president’s office. The infrastructure has deteriorated considerably in recent years, to the point of causing several collisions and fatal accidents, according to a confidential report last year by the South African firm RailSpace Projects International (RSP). ArcelorMittal however states that it has “already
invested over $500m in rehabilitating the rail infrastructure and recently committed to further
invest $200 million to further upgrade the asset”.