Liberia: HPX May Not Be Fully Operational in Liberia Until 2029

Monrovia — High Power Exploration (HPX) activities in Liberia may not in full swing until after 2029, FrontPageAfrica has gathered from the agreement signed between the company and the Government of Guinea.

HPX is seeking to export iron ore from Guinea through Liberia using the railway facility that runs from Yekepa, Nimba County to the Port of Buchanan.

The proposed use and management of the railway facility has also stalled the third mineral development agreement proffered by ArcelorMittal Liberia. ArcelorMittal’s MDA No. 3 offers an expansion of the company’s operations with an additional US$1 billion.

FrontPageAfrica observed from its review of the document that the agreement with the Government of Guinea gives HPX an option to produce an initial five million tons while carrying out the feasibility study for the 20 million tons project. However, HPX must submit a financial and technical viability study for the initial five million tons and get approval from the Government of Guinea. HPX is, however, appears not be considering the option of initial exploration until it meets all the requirements and preparations for the exploration of the 20 million tons. Experts say it would take HPX about six years for the completion of financing and construction.

HPX also needs to complete a Bankable Feasibility Studies (BFS) (including an environment impact assessment study) within 24 months of their amendment effective date. This must be approved by the Government of Guinea. After this, HPX would need to make financing arrangements within 11 months of the GoG approval.

“HPX is yet to arrange the BFS. They need to complete the full construction of the project within 54 months of the financing arrangement. It means till HPX satisfies these conditions they can’t produce anything – even 5mt. Five million metric tones can never be financially viable with request capex as they need to develop rail and port also for evacuation,” a mining expert told FPA upon reviewing the document.

Clause 13 and 26 of the agreement with the Government of Guinea says that HPX must complete Technical Guide Reference (TGR) viable study for the Guinea evacuation option and the government must approve the TGR viability report as viable before they can trigger the Liberia option.

HPX, the Guinean mining company has been in talks with the Liberian Government for the blocking of 30 million tons capacity on the Liberian rail and port even though a review of their concession agreement shows that they have only given a 5 mtpa approval by the Guinean Government.

Even though the concession agreement shows that HPX could do about 20 mtpa, however, it is requesting a 30 mtpa capacity from Liberia. On a rail that could potentially do 55 or 60 mtpa, giving 30 mtpa to a single company from Guinea means that ArcelorMittal will not be able to expand beyond 25 mtpa and that no other Liberian or Guinean company will be able to use the rail because all the capacity would have been given a company from Guinea. We are technically limiting the exploitation of our own resources in favor of the resources from Guinea.

Even if Guinea approved the 20 mtpa for HPX to evacuate through Liberia, it means that HPX will become an effective landlord in Liberia since it will have more capacity than it can potentially use and will therefore have to rent the capacity to other companies from Guinea or Liberia.

Sources in Guinea have indicated that they are not happy with the form and manner that HPX is proceeding because there are other Guinean companies that are far more advanced in their studies and approval than HPX and Guinea intends to have them use the capacity in Liberia because they are smaller projects that will not be viable if they can’t evacuate through Liberia.

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