Monrovia — Western Cluster Limited has fallen out of favor not only with the Senators of its operational counties, but also with the President, who has threatened to close the mining company in Liberia's impoverished western region.
Western Cluster Limited - Its Beginning
Western Cluster Limited is a subsidiary of Elenilto Minerals & Mining, an international mining and exploration group. The company's holds exploration and mining licenses for several iron ore deposits in Liberia and its key projects the Bomi Hills Iron Ore Project: One of Western Cluster's main projects, located in Bomi County where it's carrying out exploration and feasibility studies. It also has the Mano River Iron Ore Project which is situated in Grand Cape Mount County.
Its name derives from its area of operation in the western part of the country - The Western Cluster - which comprises Bomi Hills, Bea Mountain and Mano River. The deposits are spread out along an old railway line that runs from Mano River in the north to Monrovia on the coast. The Western Cluster has an estimated potential of 3 billion tons of iron ore, with an annual production of 30 million tons. The ore is made up of quartz, hematite, magnetite, martite, and limonite.
In 2008, Delta Mining Consolidated won a US$1.5 billion bid to develop the Western Cluster Iron Ore Deposit in Liberia. However, the company's reputation was tarnished by allegations of bribery, leading to its disqualification. Subsequently, the concession was granted to Elenilto Minerals and Mining in 2010, despite warnings from experts about the company's lack of experience. Sesa Goa Limited, a subsidiary of Vedanta PLC, acquired 51% of Western Cluster Limited from Elenilto for US$90 million in a 'flip' deal. Sesa Goa later purchased Elenilto's remaining stake in the project for $33 million. However, the Ebola outbreak in Liberia in 2014 and low iron ore prices prevented the commencement of the project, leading Western Cluster Limited to temporarily abandon it in anticipation of better market conditions. As part of the agreement, Western Cluster Limited is obligated to pay US$2.8 million annually in social development funds to the affected counties (Bomi, Cape Mount, and Gbarpolu), as well as government taxes and royalties. Additionally, the company is responsible for rebuilding the railroad infrastructure, among other obligations.
The Return
On June 4, 2022, Senator Edwin M. Snowe of Bomi County announced the signing of a Memorandum of Understanding (MOU) between the Government of Liberia and Western Cluster Limited for the commencement of an iron ore project.
During a citizens' meeting in Tubmanburg, Bomi County, Sen. Snowe revealed that the Liberian government had waived US$10 million of the US$20 million in taxes owed by Western Cluster. Additionally, he stated that the government would grant Western Cluster a Class 'A' mining license and a road user permit to facilitate the project's initiation.
Snowe outlined further financial arrangements, noting that Western Cluster would make an upfront payment of $5 million in taxes owed to the government and $4.5 million to rehabilitate the Monrovia-Tubmanburg highway.
Expressing optimism about the project's potential impact on the country, Snowe disclosed that Western Cluster Limited aimed to ship two million tons of iron ore in the first year. He urged citizens of Bomi County to coordinate a suitable time, preferably at night, to facilitate the transportation of the ore to the Freeport of Monrovia.
The Sticky Issues
However, concerns persisted regarding the transportation of the ore. The process would necessitate hundreds of trucks and earth-moving equipment, potentially leading to traffic restrictions, endangering motorists, posing environmental risks, and further damaging the already dilapidated roads.
The damage these trucks continue to cause the roads in Gbarpolu, Bomi and the freeway leading to the Freeport of Monrovia has caught the attention of Pres. Boakai who does not see the essence of the company in the country and has threatened to close Western Cluster Limited.
The Fallout
During an inspection of ongoing road rehabilitation project in Bomi on Tuesday, Pres. Boakai said, "I just met the lawyer for Western Cluster this morning and I told him we're going to close them down. Minister let me tell you, if we don't close Western Cluster down, we'll lose the bridges, we'll lose those bridges and it'll be disastrous... I went on the hill the last time, Western Cluster is not mining, they're just taking our resources and we get no reward for it. I told him emphatically this morning that we're going to close them down... If they want to invest further, then build a railway."
Pres. Boakai recalled how plying the road during the election campaign was an upheld task due to its deteriorated condition.
The President has also gotten the backing of Sen. Snowe, who was part of the delegation that traveled to India to negotiate the comeback of Western Cluster Limited. Following the President's threat to close down the company, FrontPageAfrica inquired from the Bomi County Senator his stance on the President's pending action. Sen. Snowe replied, "Western Cluster cannot continue to truck on that road. It is unacceptable. In their agreement with the government, they agreed to construct a railroad in three years. We are almost in year three and absolutely no sign of any railroad construction. I think they acted in bad faith and so I fully support the closure of Western Cluster."
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Senator Amara Konneh, Senator for Gbarpolu County recently informed Plenary of the Senate of the road destruction Western Cluster Limited had been carrying out on the roads in his county and sought the intervention of the body.
Responding the President's quest to shut the company, Sen. Konneh told FrontPageAfrica, "I support the President's threats because the Western Cluster has not met the main elements of its commitments in the Mineral Development Agreement and the Memorandum of Understanding which authorized it to truck iron ore, which had expired. They have not only damaged the road, but their trucking activities pose a threat to motorists and pedestrians. It is about time to bring them to book."
When pressed by FPA whether he is not concerned about the number of jobs residents of his county may lose, he stated, "Not really. The damage to infrastructure and the loss of lives far outweigh the few jobs they've created. Moreover, most of the trucks belong to officials of the Weah regime, crowding out ordinary Liberians who rely on their trucks for their livelihood."
