OSI uncovers the secret agreement signed in June 2023, which grants ArcelorMittal exclusive control of Liberian iron ore and transfers Solway Mining's concession in Liberia to ArcelorMittal. The deal was negotiated behind closed doors and kept secret despite involving the concession of Liberia's natural resources. https://www.opensourceinvestigations.com/
Secret deal exposed
The Deed of Settlement is agreed upon by three parties: the Government of Liberia, ArcelorMittal Liberia Holdings Limited—Cyprus, and ArcelorMittal Holdings AG—Switzerland.
The document's Introduction acknowledges that the signatories are parties to the Mineral Development Agreement (MDA) dated 17 August 2005.
In this context, the parties reckon that two issues are in dispute.
The first is about the Government granting an iron ore exploration license dated 14 October 2019 to Solway Mining Incorporated over a portion of the area in Nimba County. Thus, ArcelorMittal notified the Government that this granting violated its rights under the Mineral Development Agreement. ArcelorMittal will suffer loss or damage if the Salway Licence is not cancelled or extinguished. On the other hand, the Government notified ArcelorMittal that the issuance of the Solway Licence did not violate ArcelorMittal's rights according to the Minerals and Mining Law at the time.
The second dispute regards the granting by the Government of two Exploration Licenses for graphite within ArcelorMittal's Concession Area - one to Mekinel Holdings Ltd. dated 10 May 2018 and one to SRG Liberia Inc. dated 2 March 2020. ArcelorMittal notified the Government that the issuance of the two graphite licenses was made without first granting ArcelorMittal the opportunity to undertake exploration, development and production, which would be contrary to the MDA. In reply, the Government expressed its disagreement with ArcelorMittal's position and stated that the Licenses for graphite were issued based on clear legal and technical premises.
ArcelorMittal wins exclusive rights to Liberian iron ore
The agreement's main provisions relate to "the full and final settlement" of the disputes.
Paragraph 2.2.1 states that the Government "shall take all measures required to ensure the effective termination and extinguishment of any and all right of any kind granted to any third-party within the Concession Area of ArcelorMittal under the Mineral Development Agreement". The following sentence reads that this clause applies to the Solway Licence and Mekinel and SRG licenses.
Paragraph 2.2.2 states that Solway, Mekinel, and SRG's licenses and other granting rights had to be terminated within two weeks.
" Within 14 days of the Effective Date, or such later date that the parties may agree in writing, the Government shall terminate and extinguish the Solway License and any other License, permit, agreement or otherwise granting rights to Solway Mining Incorporated or to any third party in relation to iron ore within ArcelorMittal's Concession Area, and the Government shall provide evidence thereof (together with evidence of full and final settlement of any associated dispute between the Government and Solway) to the satisfaction of ArcelorMittal and shall confirm in writing that no other License, permit, agreement or otherwise granting rights to any party in relation to iron ore has been awarded or exists within ArcelorMittal's Concession Area".
Paragraph 2.2.4 states the obligation of ArcelorMittal to pay a "Settlement Sum" to the Government, consisting of
- USD 17.5 mln within ten days following the issuance of the New Exploration License to ArcelorMittal and the transfer to ArcelorMittal of the assets and facilities relating to the area under the former Solway License.
- USD 32.5 mln within ten days following the Ratification Date.
"The Government undertakes that it shall apply substantially all of the Settlement Sum towards settling any claims between it and third parties (including Solway) in respect of the Licenses, permits, agreements or other rights referred to in clause 2.2.2", according to a further paragraph.
Thus, the parties agreed that ArcelorMittal would remain exclusively entitled to all of the rights conferred upon it under the MDA with respect to the Concession Area.
Solway, Mekinel and SRG stripped bare
Chapter 7 of the document states that no later than two weeks after the termination of the Solway, Mekinel and SRG licenses, all the assets and facilities developed or acquired in connection with these Licenses were to be transferred to ArcelorMittal.
The Deed of Settlement is dated 29 June 2023.
In another document, dated 30 August 2023, the three parties of the Deed of Settlement and the representative of Solway Mining Incorporated acknowledge that all Relevant assets were transferred for 1 USD.
