Steel giant to delay iron ore exports from Liberia

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Tuesday, 28 April 2009

Global steel giant ArcelorMittal announced late Monday it is delaying plans to export iron ore from Liberia because of the current global economic crisis and that some 1,200 contractors will be laid off. The company, the first to start a big foreign investment in postwar Liberia, is investing more than $1.5 billion in the iron ore industry and was set to start exporting ore this year, said Joseph Mathews, chief executive officer of ArcelorMittal Liberia. Mathews told The Associated Press that the company has almost halved its global steel production in the current economic downturn, and that in turn has reduced the demand for iron ore. Mathews said the company originally had planned to ship iron ore out of the West African nation later this year but that the company will now "postpone that to maybe 2010, 2011." Some 1,200 workers who were employed by a contracting company to build a railway to transport iron ore from the mining site will have to be laid off because "the contract has been terminated." "We put a stop to our construction activities," he said, adding that the termination of the railway contract "is definite." Liberia's Lands, Mines and Energy Minister Eugene Shannon said the company's management needs to explain whether the slowdown also will affect money the company was due to pay to the Liberian government. Shannon wants ArcelorMittal Liberia to state when the company will start exporting ore and what happens to the portion of the agreement relating to exports this year. "The Mineral Development Agreement also talks about employment opportunities for our people; he needs to explain what happens to this," Shannon said. The concession agreement grants the right to ArcelorMittal to export 12 million tonnes of ore a year for 25 years. Liberia was ravaged by civil wars for years until 2003. The drawn-out conflict that began in 1989 left about 200,000 people dead and displaced half the country's population of 3 million. Source: Associated Press