The Government of Liberia (GOL) is at a crossroads, navigating a US$50 million arbitration notice filed by the Solway Investment Group (SIG) while contending with ArcelorMittal Liberia's (AML) demands for exclusive control of the Yekepa-Buchanan railway. The stakes in this tripartite negotiation extend far beyond the arbitration claim, posing significant questions about the nation's economic sovereignty and governance of critical infrastructure.
The dispute began when Solway Mining Incorporated (SMI), SIG's Liberian subsidiary, accused GOL of breaching its commitments after AML interfered with SMI's exploration license. According to a May 2022 letter from the Ministry of Mines and Energy to AML, "the area occupied by Solway Mining Incorporated under its Class A License in the Nimba region was legally granted and should have been respected by all stakeholders." However, AML allegedly disregarded these boundaries, ultimately paying GOL for the disputed license area instead of compensating Solway directly. This action prompted SIG's arbitration notice and its US$50 million claim.
Under the Boakai administration, Liberia lacks the financial capacity to meet SIG's demands, creating an opening for AML. Sources close to the negotiations reveal that AML has offered to pay the US$50 million settlement--but only if GOL ratifies the controversial third amendment to AML's Mineral Development Agreement (MDA). This amendment would grant AML exclusive rights to the Yekepa-Buchanan railway, a move that has faced significant opposition.
AML's 2005 MDA already grants the company significant control over the rail and port assets tied to its operations. However, the agreement's provision for "third-party access" to infrastructure has remained a contentious issue. In a letter from Speaker Bhofal Chambers to former President George Weah rejecting the third amendment, the legislature expressed concern over AML's "monopolistic tendencies" and their impact on other stakeholders, noting that "an open and accessible rail system is in Liberia's best interest to foster economic growth and competition."
Speaker J. Fonati Koffa, who served as Deputy Speaker at the time of the rejection, has continued to champion the multiuser rail model. Now leading the 54th Legislature, Koffa faces renewed pressure as AML seeks to reintroduce the amendment. In a direct challenge to his leadership, a faction of lawmakers calling themselves the "Majority Bloc" has attempted to unseat Koffa, reportedly with AML's tacit support. A confidential source confirmed that members of the Bloc sought financial backing from AML to fund their campaign against Koffa. While AML has not responded to inquiries about its involvement, the implications of such an alliance are troubling.
The case for a multiuser rail system
The controversy over the third amendment is not just a political battle -- it's an economic decision with far-reaching consequences. Proponents of a multiuser rail system argue that exclusivity stifles competition and reduces government revenue potential. Recent reports indicate that Liberia could earn billions in fees from multiple users of the rail. This figure dwarfs the US$30 million SIG has indicated it would accept in a settlement--a sum that represents less than one year's worth of potential rail fees from even a single user under a shared system.
Moreover, AML's own 2023 annual report reveals that the company's rail operations have been a consistent source of financial losses. The report notes that "efficiency challenges in rail management contributed significantly to operational deficits, necessitating a reevaluation of exclusive ownership models." This acknowledgment casts doubt on AML's ability to manage the railway effectively, further strengthening the case for a multiuser system.
Governance challenges, ethical concerns
The arbitration dispute also underscores broader governance issues within Liberia's resource management framework. The LEITI Act of 2009 mandates transparency and accountability in all extractive sector operations, yet the opaque nature of the current negotiations raises questions about GOL's adherence to these principles. The Ministry of Mines and Energy's August 2022 letter to AML highlights the need for better coordination, stating that "future engagements involving rail and port infrastructure must prioritize national interest over corporate expediency."
Critics argue that granting AML exclusive rail rights would undermine Liberia's commitment to transparency and equitable resource allocation. Speaker Koffa has been vocal in his opposition, emphasizing the need for a fair and open system. "We cannot afford to mortgage our national assets to a single entity," Koffa stated in a recent legislative session. His resistance to AML's demands reflects a broader vision for Liberia's economic future, one that prioritizes shared prosperity over monopolistic control.
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The path forward
The Boakai administration faces an unenviable choice: accept AML's terms and risk public backlash, or pursue a multiuser rail model that aligns with international best practices but may prolong the arbitration dispute. The stakes are high, not just for the immediate resolution of the US$50 million claim but for Liberia's long-term economic trajectory.
Solway's willingness to settle for US$30 million presents a potential compromise, but GOL's financial constraints leave limited room for maneuvering. With Speaker Koffa standing firm against exclusivity and the Majority Bloc's actions raising ethical concerns, the path forward remains fraught with challenges.
For now, Liberia's critical rail infrastructure hangs in the balance. The outcome of these negotiations will determine not only the resolution of the Solway dispute but also the future of resource governance in the country. As GOL navigates this complex landscape, the need for transparency, accountability, and a commitment to national interest has never been more urgent.
