There was huge celebration last week in the southeastern port city of Buchanan, Liberia, as the country commenced its first shipment of iron ore since the end of its civil war. Many foreign dignitaries and officials of the Liberian government attended the ceremony. The ceremony was organized by ArcelorMittal, the world’s largest steelmaker, which sealed a U.S. $1 billion deal with the government in 2005.
The company’s CEO, Indian-born billionaire, Lakshmi Mittal, who flew in from London to attend the occasion said, “Liberia has been through some difficult times in its history, but today it is back on a track of recovery and growth.”
Before the conflict, Liberia was one of the world’s top five producers of iron ore. This resource deposit accounted for more than half of the country’s export earnings in the 1970s and 1980s. Iron ore production was completely halted during the war and its infrastructure left in ruin.
Describing the challenge his company faced working in Liberia over the past five years, Mittal said, “We had to completely rebuild 250 kilometers of railway between the mine site and the port.” But he also said they are the first to submit a report on the environmental impact of their operations in keeping with the country’s new laws “even discovering some new species in the process”. Previous mining operations destroyed some of the country’s rich biodiversity, leaving rivers completely dead.
The company said the first test shipment took place last week and it “aims to ship four million tones of ore each year”. The launch marked an important milestone in the Liberia’s economic recovery. The country economy was shattered by years of conflict.
Mittal added, “During the past five years, Liberia has attracted $16 billion investment. The country’s ranking in the World Bank doing business survey has advanced significantly. I really can see and feel the differences that have taken place since my last visit here.”
President Sirleaf also reacted saying, “Today we have Buchana and Yekepa beginning to come alive again as we knew them in 1970s.”
Her administration renegotiated the initial contract the company signed in 2005 with Liberia’s unelected transitional government. The deal increased the investment to U.S.$1.5 billion in order to ensure that there were “mutual benefits on both sides and the national interest protected.”
Sirleaf said her administration was creating the environment where investors can bring in their “private capital and know that that capital is safe”. She said AcelorMittal’s investment in 2005 –being the first large scale at the time – served as the catalyst for other investment deals the country has continued to attract in its resource sector. She was cheered on by some of the Liberians now working for ArcelorMittal, chipping away at the huge unemployment crisis the country faces. She encouraged them to gain the requisite skills and training for top management positions in the company which so far only one Liberian has occupied.
Referring to the first train movement in the country in many years, she said “all along the route, you will have Liberians in the various communities just waving and shouting saying: “‘Liberia is back!’ That’s a great message.”
Liberia was a founding member of the United Nations and the Organization of African Unity. A military coup overthrew the Americo-Liberian establishment in 1980, marking the beginning of political and economic instability and two successive civil wars that left approximately 250,000 people dead and devastated the country’s economy. A 2003 peace deal led to democratic elections in 2005. Today, Liberia is recovering from the lingering effects of the civil war and related economic dislocation, with about 85% of the population living below the international poverty line.