28 January 2013

Liberia: Arcelormittal Ready to Ship More Iron Ore - Invests Over U.S.$75 Million in Buchanan Port

Officials of ArcelorMittal Liberia say the company has invested about US$75 million in the preparing of the Port of Buchanan for operations, and that the world's steel giant, after a heavy rainy season here, is now poised to export more iron ore.

The company has promised it will export about 4 million metric tons of iron ore annually, but the heavy rainfall and moisture environment of the country affected its operations months back, Joseph Matthews, Head of Government and Community Relations for ArcelorMittal Liberia, told Mining News last November.

Taking journalists on a tour of the port's facilities Friday, where a vessel was being loaded with iron ore, officials said the company during the rainy season, the company could not reach its monthly export target of at least 250,000 tons, but they would work hard during the rainy season to catch up.

"Our target is 4 million tons per year; 250,000 tons is the minimum we are looking for on a monthly basis, and now that the dry season is here we will exceed the 250,000 tons to catch up with the balance of the 4 million that will be required," Rail Manager Don Wilson noted.

At least 55,000 tons is loaded in each vessel with in a period of two days, and it takes 42 days to reach its destination in China, where three-quarters of the company's products are exported. "From the time taken to extract the ore from the mine to the time it is stock pile here (Port) can be anything between seven and 21 days," Wilson stated.

Because of the high moisture and rainfall in Liberia, the Company spent at least US$8 million and stockpile shed that covers 105,000 tons of iron ore, Wilson and Hesta Baker, ArcelorMittal Liberia Communication Chief. "Liberia is the only country using this kind of thing because of the high moisture, and we spent between US$8 and 10 million to construct bit last year," Hesta said.

In the absence of such covering, the iron ore would not be fit for export into the international market. Iron ore shipments can liquefy while on ships if the moisture content is too high, raising the risk of the cargo shifting and capsizing the vessel.

"Yes, it has impacted our shipment," Joseph Mathews told Mining New of the moisture and rain condition in Liberia late last year. "This is one issue that we haven't completely got a grip on. We simply cannot load with the vessels open (in the rain)," he said when asked about moisture impacting the transport of iron ore from Liberia.

Industry sources have said high moisture content is also making the transport of iron ore from Liberia's neighbor Sierra Leone unsafe, causing extensive loading delays, Mining News said.

The International Maritime Organization has guidelines governing moisture content in iron ore.

In Liberia, Matthews said the company had been targeting three shipments of iron ore a month but that had been reduced to one to two because of wet weather. He said the company hoped to raise that to four with the onset of the dry season, while it is expected to hit 10-15 million tons per year by 2014 or 2015.

Port Superintendent Jim Page along with Wilson and Hesta in separate remarks said ArcelorMittal's investment in Liberia is durable and the company remains committed to helping rebuilds Liberia, and that's why it continues to invest hugely.

"We are here to help to develop Liberia; we have built the capacities of Liberians, employed hundreds of them and we have placed them in management positions of our company," said Page.

Wilson added that in the coming years, when the investment is solidified, Liberians will occupy almost all positions, from supervisory to top management level. The Rail Manager insisted that more investments will be done at both mining sites and the port as time goes on, and as the operations expands.

"The total investment that ArcelorMittal has made in developing the Port of Buchanan--equipment, infrastructure, capacity building, the luby, [...] -- we have today spent up to US$75 million dollars on the port alone," Wilson disclosed. "That is from the day we first started working here to now."

He continued that over the next 20 years, ArcelorMittal will continue to be here and the port will be more developed. "As we go forward, every time we find region [important] to our investment, we will be continuing that investment."

There are plans in place to construct infrastructure on the mine, which will require new railway system and expansion of the port's facilities to make work and movements even better, Wilson intoned. "Every step of the way we will assess the situation, we will determine what it requires to make it a viable proposition...and we'll make the necessary investment in equipment, in training, in development in infrastructure and employment."

No Plan To Pull Out

Officials of the world's largest steelmaker, Wednesday (Jan 23) stated that they are not parking their bundles to sell shares and pull out of the country like some companies have done.

"No, we won't be leaving; we are here for long; we are in for a long haul," stated the company's communication chief Hesta Pearson, backed by new CEO Antonio Carlos, Environmental Manager Johns Howell and Chief Operating Officer Geoff Jolly.

ArcelorMittal remains Liberia's first post war foreign direct investment (FDI) which kicked off with US$900 million even before the first post war democratic elections was held in 2005. The deal was revised with at least 22 major changes favoring the country when President Ellen Johnson Sirleaf took office and called for re-visitation of all concession agreements signed before her administration.

Following revision, the deal hit US$1billion, but during his visit to Liberia in 2008, the founder And President of the company Lakshmi N. Mittal stepped up the investment to US$1.6 billion, the country's highest in multiple decades, before China Union's US$2.6 billion's beat it two years later.

Since 2006, ArcelorMittal has invested about US$820 million: at least US$800 million on preparation including building of infrastructure (roads and ports) and US$19 million on corporate responsibility as spelt out in the deal, officials said.

The company has constructed a hospital, a school, a railway and refurbished the Port of Buchanan for its long term operations, among others. It has put into place strong mechanisms to protect the environment while carrying out mining activities, said John Howell.

With at least 500 Liberians currently employed, the company exported its first shipment of iron ore for the first time in 30 years October 2010.

CEO Carlos said the company is very committed to Liberia and the investment it has in the country. "Liberia is one of the most important investments we have, the first big investment to come to post war Liberia...and we are committed to reaching our goals," he said, commending the Liberian Government and the local people for the smooth existing cooperation.

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