The Government of Liberia and HPX Group subsidiaries Ivanhoe Liberia and SMFG entered into a Framework Agreement on December 20, 2019.
It was subsequently amended on March 30, 2022.
The purpose of the Framework Agreement was to set forth the framework for the negotiation of an agreement to secure sufficient rail and port infrastructure in the Yekepa-Buchanan rail and port corridor in order to be able to evacuate iron ore from HPX’s Guinean Nimba Iron Ore Project.
The Framework Agreement as amended was announced publicly and received strong support from the Government of Liberia.
Since 2019 HPX has continued to negotiate with the Government of Liberia on terms and payments that would be payable to the Government of Liberia once the final agreement is signed.
Because the Framework Agreement merely committed the parties to engage in good faith negotiations of a concession agreement on terms that would then provide access to government owned rail and port infrastructure, and not an agreement for the actual use of those assets, it did not require ratification under Liberian law.
HPX Group agreed, as a gesture of goodwill, to make refundable advance payments to the Government of Liberia at its official request of some of the anticipated fees and taxes that that would be due and payable to Liberia if and when a binding concession agreement came into force. If none did, these advance payments would be refundable to the HPX Group.
These advance payments, which were paid into the Government of Liberia Revenue Account at the Central Bank of Liberia through the United States Government Federal Reserve Bank of New York consisted of US$7 million in December 2019 and US$30 million in March 2022.
The advance payments are refundable if certain milestones relating to the negotiation and implementation of the concession agreement are not met.
As it stands today, several of these milestones have been missed and the HPX Group has reserved its rights to seek refund of the upfront payments.
The HPX Group has not done so because of ongoing discussions with the Liberian Government that the HPX Group believe will ultimately result in an agreement beneficial to both Liberia and the HPX Group.
The HPX Group has always been entirely transparent about the fact that the advance payments were made to the Government of Liberia and publicly disclosed them.
HPX remains committed to the development of a world class infrastructure corridor, owned by the Government of Liberia, and operated under the principles of non-discriminatory, multi-user access with each participant to meet responsible access charges, under the oversight of an independent operator not linked to mining operators.
HPX remains committed to supporting the Government of Liberia to achieve this vision and welcomes full transparency of all transactions and dealing between the Liberian Government and mining companies and other concessionaires.
As a US Company, HPX and its directors and management remain committed to and strongly embrace the highest standards of ethical behavior that are in line with community and government expectations not only in Liberia, but internationally and are subject to and committed to fully comply with the laws of Liberia, the United States of America and other jurisdictions governing all such transactions.
