Ivanhoe Liberia, the company acting on behalf of High Power Exploration (HPX) in Liberia, says it is willing to work along with ArcelorMittal Liberia (AML) to improve the mining sector.
“We would like to work closely with ArcelorMittal for the benefit of Liberia because the better we work together, the better it is going to be for everybody and for the companies and for Liberia,” the Chairperson of Ivanhoe Liberia Ltd, & Société des Mines de Fer de Guinée (SMFG) stated.
Apparently, the assurance from the company came against the perceptions that AML has begun brewing concerns about HPX’s presence in Liberia but the mining company said in no way are they competitors as ArcelorMittal has always been a steel company.
“We are a pure mining company while Arcelor is much more a steel company which explains why they sometimes stop active iron ore mining. We are pure mining company and so our life depends on developing mines and exploiting new mines as we have done in the Congo. We are mine builders and operators,” said Guy de Selliers.
Since HPX envisaged shipping iron ore from the Nimba Mountain in Guinea via rail through the port of Buchanan and completing the railroad project with a deadline falling between 2026 and 2027, its greatest frustration has been the apparent hiccup with working more closely with ArcelorMittal.
“We have found it difficult to engage with them and this is the point I’m trying to make and I am happy to be quoted; which is that, it is so much better for Liberia to have, not just one project (ArcelorMittal), but two projects,” the HPX boss maintained.
He explained further that it is so much better for Liberia to maximize the use of that remarkable infrastructure, which they have had for a long time, which is a great infrastructure. It is better for Liberia that at the Port of Buchanan there is 45 million tons of ore being shipped per year than just 15 (million).
“I think it is better for us, to be honest with you, because you have got economies of scale if you ship 45 million as opposed to 15 million on the railroad. You spread the cost over a much larger tonnage. So there clearly are economies of scale and I’m just quite optimistic that it makes sense for everybody to work together and I can’t imagine that anybody would want to say ‘no, no; we only want to rely on ArcelorMittal,” Selliers noted.
HPX acquired the rights to the Nimba project concession in late 2018 early 2019 at a time when iron prices were around $65 compared to today’s $94 and the company explained that it acquired these rights through a competitive process with several competing bidders run by the consortium of BHP, Newmont and Areva which owned the said rights.
HPX believes that having two major new investments being developed in parallel, involving Arcelor’s $800 million and HPX/SMFG’s $600 million in Liberia alone, is of course much better for Liberia but it is also better for AML.
“The railroad transport costs will be lower for them if spread over a much larger tonnage than if they were the only user. So I am confident that AML will ultimately welcome our project and will want to work constructively with us,” the SMFG Chairperson assured.
“US$2.7 billion for 20 years is a lot of money and we know exactly, year-by-year, month-by-month where we get to take the ore but we have a detailed mining plan for 20 years. In Nimba north, there’s 1.5 billion tons of ore of a lower grade,” he stated further.
He said the port is an expensive part of the project because a new berth must be built adding, “Our plan is to build a new berth in Buchanan, which will not disturb ArcelorMittal’s operations in any way, shape or form.”
They said they wanted to keep the berth on the land side and it was agreed that that they will build a berth on the jetty side, on the leeway of the breakwater, but that it was an expensive process and of course one has to have all the stockpiling and bulk material handling and storage.
“And that’s several hundred million dollars right there. And of course, we will be responsible for all the costs relating to the expansion of the railroad from 15 million to 45 million (tons) because we want to have that capacity,” SMFG Chairperson stated.
Earlier, Selliers stressed that AML should not have been threatened by HPX project as the company welcomes the AML project because AML’s project is essential for the economic development of Liberia and for the social stability in the whole Nimba region.
Recently, in an exclusive interview via zoom with the Daily Observer’s Managing Director, Bai Sama G. Best, Selliers explained that there are lots of iron ore in the north of Liberia and in the southeast of Guinea and that the first project ongoing by his company is the pre-feasibility study on the caviar of iron ore.
“We should work with ArcelorMittal, so that we have one big training center, and for anything which has to do with railroad transport and material handling or we could have ours separate; but there is a real benefit by not having a monopoly by one company over an infrastructure,” Guy de Selliers intoned.
He outlined one of the benefits as ‘if two people are using that infrastructure; they have to define the rules of the game very precisely, up-front. Any kind of adverse behavior by one could affect the operation of the other; so they would monitor each other.’
“And you’d get much higher standards on a multi-user infrastructure than on one which is monopolistic in nature. If we have to share a railroad, we would both be making sure that, whatever they have to do, whatever we have to do, we do it to the highest standards because otherwise, if it doesn’t operate at the highest standards, we’re both penalized,” he reiterated.
Selliers proffered that his company also wants to partner with AML in training domestic workforce which is always a key part of any mining project, noting, “So that we have one big training center, and for anything which has to do with railroad transport and material handling. Or we could have ours separate, I don’t mind. But there is a real benefit by not having a monopoly by one company over an infrastructure.”
One of the benefits is that, if two people are using that infrastructure, they have to define the rules of the game very precisely, up-front. Any kind of [adverse] behavior by one could affect the operation of the other and that they would monitor each other and get much higher standards on a multi-user infrastructure than on one which is monopolistic in nature.
“If we have to share a railroad, we would both be making sure that, whatever they have to do, whatever we have to do, we do it to the highest standards because otherwise, if it doesn’t operate at the highest standards, both of us will be penalized,” Selliers stated among other things.