ArcelorMittal, Liberia sign amendment to existing mineral development agreement

The Government of the Republic of Liberia and ArcelorMittal (MT) have signed an amendment to the existing mineral development agreement, or MDA, which was yesterday ratified via the Liberian legislative process, extending the duration of the agreement to 2050, with a right to renew for a further 25 years. The agreement provides for the Government’s desire to make the Tokadeh to Buchanan rail corridor accessible to multiple users. The new concentrator forms the centerpiece of ArcelorMittal’s $1.8B expansion project, bringing the company’s total investment in Liberia to $3.5 billion – the largest foreign direct investment in Liberia’s post-war economy. In addition to the concentrator, the expansion project has involved significant investment in the rail infrastructure running between Tokadeh and Buchanan, upgrades to the existing port infrastructure including construction of an additional berth at the port in Buchanan, and other infrastructure investments including two power plants. The expansion project, which is nearing completion, will see iron ore shipments increase from historic levels of approximately 5M tons per annum to 20M tons per annum in 2026, alongside improvements in product quality to higher grade, higher value ore. The company is also undertaking feasibility studies for further expansion of its iron ore asset beyond 20M tons per annum. The agreement makes provision for a multi-user agreement regarding the use of the rail infrastructure, where other users who wish to use this infrastructure are required to invest in its expansion in order to meet their transportation needs. ArcelorMittal is currently expanding the railway infrastructure so it can transport up to 30M tons of iron ore annually, should the feasibility studies it is undertaking prove successful and a decision is taken to expand iron ore production beyond 20M tons per annum. This railway capacity will be reserved for ArcelorMittal’s use. Under the terms of the agreement ArcelorMittal will pay $200M to the Government of Liberia for certain rights it acquires per the agreement, namely the mining rights extension and reserved access to railroad capacity the company is investing in.