Liberia and Sable Mining are expected on Friday to sign a 25-year iron ore transshipment deal worth $1.3 billion.
The (Liberia) National Investment Commission, which along with the Ministries of Lands Mines and Energy, Finance and Development Planning and Justice comprising the Inter-ministerial Concession Committee that negotiate such deal, Liberia will allow the transshipment of Guinean-based iron ore via the port of Buchanan in Grand Bassa County, according to the Executive Director of the Commission, George Wisner in a statement Thursday.
Wisner said Sable Mining will invest $300 million in the first five of the 25 years and thereafter $1 billion in the remaining 20 years of its operations.
The company is also expected, as part of the deal, to rehabilitate and expand the existing railroad from Yekepa in Nimba County to the port of Buchanan in line with the use of a third party access rights between the Liberian government and steel giant ArcelorMittal, according to the release.
Moreover, the company, as per the deal, will pay a signature fee of $250,000 and on an annual basis, beginning on the first anniversary of the date of operations, will make a contribution of not less than $2.5 million to the social development funds of the affected counties in the deal. The company will also pay an annual concession fee of 1.5 million to $5 million for the transshipment of iron ore from zero million/tonne to 10 million/tonne every each year, as well as taxes and duties as mandated in the deal.
Thus, the company is mandated in the deal to construct a new railroad from Guinea via Tokadeh to Yekepa to line with the railway there.
Upon consummation by the Liberian legislature, the Sable Mining is expected to begin transshipping iron ores later this year.
Wisner: “This agreement is important for several reasons. First it marks the fulfillment of a historic moment of regional cooperation, which dates as far back as July 14, 1973 when the government of Liberia under President William R. Tolbert and the government of Guinea under President Ahmed Sekou Toure signed a protocol that paved the way for the transshipment of minerals between the both countries,” Wisner said.
“Second, the agreement affirms the Mano River Union (MRU) Accord and ECOWAS Conventions which aim to expand economic development through enhanced regional cooperation and cross-border trade.
“Third, the agreement stands to brin enormous social and economic benefits, in the immediate as well as medium to long term to Liberia, in particular, and also to Guinea—two countries that have been seriously hit by the Ebola Virus Disease…
“Finally, the agreement will also have the spin-off effect of enhancing political and security cooperation between both countries.”