When world steel giant Arcelor Mittal stepped on Liberian soil for the first time in 2005 to invest in the post war nation—with its citizenry thirsty for jobs and the country hungry for investment—for many it was a sign of relief and new page in the country’s history.
The Government of Liberia in 2006 entered into a 25-year Mineral Development Agreement (MDA) with Mittal Steel to mine iron ore in the country. As part of the agreement, the company promised to pay US$73 million over the 25 year span of the agreement to support socio-economic development in Liberia through the County Social Development Fund (CSDF).
Mittal Steel was one of the first of a number of big investments in Liberia’s iron ore sector, seen as a trendsetter for other investors. Under its agreement with the Government of Liberia, negotiated in 2005, a re-negotiated contract was signed in 2006, giving Mittal the 25-year concession for iron ore extraction.
Specifically, as per the MDA, Mittal is to pay the amount of US$73 million to three counties including Nimba, Bong and Grand Bassa and also carry out other corporate social responsibilities in several communities, including the construction of education, medical and other facilities. Taking over the Yekepa Mine in Nimba County, Mittal promised to also construct the main highway linking the mine to the rest of Nimba County, the Ganta-Yekepa road.
Mittal Steel also promised to reopen mines in Nimba County (Tokadeh, Gangra and Yuelliton mines), renovation of Buchanan port, and rehabilitation of the 270 kilometre railway from Buchanan to Yekepa and construction of a 250-megawatt power plant to supply power. With a bright prospect, Mittal Steel predicted that by 2012 it aimed to ship four million ton of iron ore from Liberia each year and plans to increase global iron ore production to 100 million ton by 2015.
Having mining operations in 10 countries including Algeria, Bosnia and Herzegovina, Brazil, Canada, Kazakhstan, Liberia, Mexico, Russia, Ukraine and the U.S.A., Liberians took the promises by Mittal Steel at face value. But within few years, the company has shifted significantly from its pledges. Last June, the company commenced a massive layoff of employees citing plummeting ore price, saying it was struggling to remain profitable in Liberia. At the time, over 198 employees were earmarked to be redundant and despite protest from the workers and constant calls for the government to intervene, Mittal Steel still implemented its redundancy policy.
Affected workers staged persistent protest against the redundancy action of Mittal but their concerns were not addressed as the company carried out its plan amid calls to the Government of Liberia via the Ministry of Labour to intervene by protecting those Liberians on the job. FrontPageAfrica gathered that following the Mittal’s Job cut, over 200 employees were affected by the process, thus leaving high unemployment in a country already facing challenges to provide jobs for its burgeoning population.
Less than two months after a massive job cuts, Mittal Steel is once again in the spotlight for another odd reason—it has accordingly opted to pay bonuses and shift allowances to workers of the Port, Transport and Human Resource departments among others while refusing to pay the rail and mine sections. Sources told FPA at the weekend that Mittal insists that the two departments have achieved limited production and will not get their stipulated bonuses.
Go-slow at Mittal Steel again
The bonus cut has led to go-slow at the company operations sites raising fears that it could be a reminiscence of similar situation when some citizens of Nimba County staged a protest that turned violent and led to the destruction of properties of the company. The ongoing bonus cut adds to Mittal already dismal record of seeking the welfare of its workforce and it is unclear what the employment contract of these employees says about the payment of bonuses in relation to achieving production.
According to sources at the company operation site, workers of the rail and mine departments of the company are on a go slow in demand of bonus and allowances. The go slow is said to be happening in Yekepa, Nimba County – northern Liberia, where the ore is mined and transported to the port of Buchanan, Grand Bassa County for shipping. The bonus cut is one of many examples of jobs insecurity at Mittal Steel and is the second incident in succession where workers have to be subjected to harsh working environment.
Ganta-Yekepa Road still in Limbo
On another major promise to the people of Nimba County, Mittal Steel had promised to provide funding for the construction of the Ganta-Yekepa Road which leads directly to the mine but in recent months, according to sources, the company has been reneging on fulfilling its pledge. Relying on the promise from Mittal to sponsor the Road construction, the Ministry of Public Works awarded the contract for the road to a Senegalese contractor, Compagnie Sahélienne d’Entreprises (CSE) through a signed agreement in December 2014.
In March this year, despite difficulties encountered in shipping, the Senegalese construction company CSE succeeded in getting heavy equipment needed to begin construction work on the Ganta-Yekepa road. As per the construction contract, the Ganta-Yekepa road is a US$40 million two year project for the construction of the major highway.
The Senegalese company, upon bringing the equipment to the country, took government officials including Public Works Minister Gyude Moore, Senate Standing Committee Chair on Public Works, Senator Oscar Cooper and other government officials on a guided tour and displayed the heavy duty and sophisticated equipment brought into the country to commence the work with an eye on securing future contracts.
The equipment which includes several trucks, caterpillars and some construction earth moving equipment needed to crush rocks for the road pavement raised the hope of citizens of Nimba that some of the road woes were about to be solved but the Mittal delay has been raising anxiety amongst the people of the county. In spite of the contractor’s willingness and proven ability to commence work, unavailability of funding continues to impede the start of the construction work.
Although Mittal says it remains committed to sponsoring the Ganta-Yekea road project, FrontPageAfrica has gathered that the company is yet to provide funding and is waiting on the Government of Liberia to make available a budgetary allotment through the 2015-2016 budget for the start of construction work. Joe Mathews, General Manager for External Affairs, Arcelor Mittal Mining based in London said in a statement recently that the company remains committed on fulfilling its promise to the people of Nimba in particular and Liberia in general
“There is no change to the road commitment by the Company, and we are working with all stakeholders towards meeting this end. We continue to make revisions to ensure that the Liberian operations remain viable at the current iron ore price level, but this is a promise that is very important to us and one we made to the people of Nimba. We have no intention of stopping this road project.” Matthews said.
The Mittal Steel official promised that the company continues to working in ensuring its operations in Liberia remain viable. “We continue to make revisions to ensure that the Liberian operations remain viable at the current iron ore price level, but this is a promise that is very important to us and one we made to the people of Nimba. We have no intention of stopping this road project,” reaffirmed Mathews.
Despite the assurance by Matthews, the company continues to face problems in Liberia, cutting the bonuses of employees, and coming slow on its pledge to provide funding for the Ganta-Yekepa road project. Observers believe Mittal Steel has to come clear on the status of its operations in Liberia in the wake of the massive layoff, bonus cuts and delay in providing funding for the Ganta-Yekepa road project.
For the foreseeable future, time is running out for multinational companies to continue to engage in attitudes which remind Liberians of the ugly past when big companies operated in the country, failing to fulfill big promises, operating for years, extracting resources and leaving behind nothing substantial in terms of development for the locals.
Mittal Steel predecessor, the Liberia Americana Mining Company (LAMCO) operated the Yekepa mine for years and was coerced to cease operations during the Liberian civil war. LAMCO left behind no tangible development as the Ganta-Yekepa road is still a dirt path.
Source: Front Page Africa
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