Liberia: HPX Demand for New Rail Operator
President Joseph Boakai’s recent approval of a rail agreement that appears to favor High Power Exploration (HPX) and Guinea’s Nimba project over ArcelorMittal’s longstanding operations in Liberia could have far-reaching consequences. While the administration has framed this decision as a move to maximize economic benefits, it risks undercutting Boakai’s own ARReST (Agriculture, Roads, Rule of Law, Education, Sanitation, and Tourism) agenda by discouraging investment, stalling critical infrastructure projects, and creating legal and diplomatic uncertainties.
The Mittal Factor: A Risk to Jobs and Investment
ArcelorMittal, one of Liberia’s largest foreign investors, had already committed an $800 million expansion to its mining operations. This investment was poised to create thousands of jobs, revamp infrastructure, and generate substantial government revenue through taxes and royalties. However, Boakai’s decision to approve a competing rail access deal with HPX–without fully addressing Mittal’s existing rights–raises concerns that the company may put its expansion on hold or scale back its operations.
For a country with a fragile economy and rising unemployment, such a setback could be devastating. If Mittal chooses to delay or suspend its investment due to the uncertainty created by this decision, Liberia could miss out on hundreds of millions of dollars at a time when the economy desperately needs growth. The stakes are even higher considering that USAID has recently discontinued over $50 million in aid to Liberia. With foreign assistance shrinking, maintaining investor confidence should be a top priority for the government.
Legal and Diplomatic Fallout
Beyond the economic implications, Liberia could also face serious legal and diplomatic repercussions. ArcelorMittal has long-standing agreements with the Liberian government regarding its operations and rail usage. If the administration is perceived as altering these terms to accommodate a competitor, it could face protracted legal battles, further delaying much-needed infrastructure projects. The prospect of arbitration or lawsuits could not only slow economic progress but also send a dangerous message to other potential investors: that Liberia’s business environment is unpredictable and subject to sudden political shifts.
Moreover, geopolitical factors cannot be ignored. The HPX-backed Nimba project primarily benefits Guinea, with ore set to be transported via Liberia’s rail infrastructure to the Buchanan port for export. By prioritizing a Guinean mining project over Mittal’s expansion, Boakai’s administration could face criticism over whether it is truly acting in Liberia’s best interest.
Foreign investors and international financial institutions closely monitor such policy shifts. A perception that Liberia is reneging on agreements could lead to hesitancy in future investments, especially in critical sectors like infrastructure and energy.
A Blow to the ARREST Agenda?
Boakai campaigned on a promise to rebuild Liberia’s economy through his ARReST agenda, emphasizing the importance of infrastructure, investment, and job creation. However, the HPX deal could end up working against these goals. If Mittal pulls back, the immediate consequences could include stalled employment opportunities, reduced government revenue, and a setback in efforts to improve roads, education, and public services–key pillars of the ARReST framework.
Liberia’s rail infrastructure is a national asset that must be managed in a way that maximizes benefits for the country. Mittal has already invested over $500 million to rehabilitate the Yekepa-to-Buchanan railway after it was rendered unusable by years of war and neglect. Now, with theft and vandalism frequently disrupting operations, any policy shift that discourages further investment in infrastructure maintenance and expansion could backfire.
For Liberia’s long-term development, investor confidence is crucial. The government must ensure that its policies attract and sustain investment rather than drive it away. Instead of rushing to approve a deal that could cause economic instability, Boakai’sadministration should take a more measured approach–one that ensures existing agreements are honored while negotiating any new arrangements transparently and strategically.
At a time when Liberia needs financial inflows, infrastructure expansion, and job creation, prioritizing the wrong deal could cost the country far more than anticipated. If Mittal pauses its expansion, the negative economic and political consequences could directly contradict the very foundation of Boakai’s ARReST agenda. The administration must tread carefully, or it risks jeopardizing not just an $800 million investment, but the broader stability of Liberia’s economic future.
By New Republic.
