The iron ore loader rising more than 20 metres into the sky at ArcelorMittal’s berth at Buchanan port is testament to the multinational company’s ambitions in Liberia. It is part of a $1bn expansion plan to triple annual production from the current maximum of just over 5m tonnes at the Tokadeh mine, 240km to the north.
But the loader stands idle. Construction halted after Ebola struck the west African nation in 2014 and many contractors used clauses in their contracts to stop working. As Liberia tackled the deadly virus, the price of iron ore fell to less than a quarter of its 2011 peak and work has not resumed on the expansion project. That is despite the country being over the worst of the Ebola crisis and the price of iron ore rising more than 40 per cent from its December 2015 low.
The loader’s lack of use highlights the challenges mining companies face in Liberia. There is plenty of potential but, through a mixture of bad luck, unfavourable market forces and ineffective development policies, much of the extractive industry is suffering.
ArcelorMittal, which began commercial operations in 2011, is the sole major iron ore miner still based in Liberia. Two much smaller miners withdrew in the past six months. ArcelorMittal is still there only because, according to Simon Wandke, chief executive of the company’s global mining operations, it manages the whole value chain in the country. “We control the mine, the rail and the port,” he says. But production is expected to be only 3m tonnes this year, down from 4.9m last year and 5.2m the year before.
Operating costs on a per-tonne basis have been slashed by 46 per cent since 2014 and the company is in discussions with the government to renegotiate some terms of its contract while the downturn in prices persists. “We’ve got the ore, we’ve got the strategy, we know there’s a market for it,” Mr Wandke says.
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