Home Governance Arcelor Mittal In ‘Hot Water’… ‘Deceives’ Gov’t of Over US$3m

Arcelor Mittal In ‘Hot Water’… ‘Deceives’ Gov’t of Over US$3m

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MONROVIA: The ‘Investigative’ INDEPENDENT Newspaper has gathered that global Steel Giant, Arcelor Mittal-Liberia branch, has been suspected of defrauding the Liberian government of financial revenue, amounting to over US$3m.

It is also gathered that the reported action of the mining company comes despite committing to several provisions as enshrined in the Mineral Development Agreement it inked with the Government of Liberia.

This latest financial discovery comes at a time when the Liberian Senate is awaiting a report from a Joint Conference Committee (JCC), at the Legislature which is expected to either recommend concurrence with the House of Representatives or rejection of the much heralded GOL-Arcelor Mittal Mining pact.

According to a joint formal report, prepared and released by Liberia’s Inter-Agency Compliance and Monitoring Institutions, Arcelor Mittal-Liberia miserably failed to meet up with its payment to the government of Liberia relative to Surface Rental, Scientific Research Fund, Mining & Geology Institute, Scholarships and Import Duties, among many others.

The report which covers Arcelor Mittal Liberia’s operations in Nimba and Grand Bassa Counties strongly recommended the immediate settlement of all outstanding financial obligations of the company within a period of 90 days, as of February 15, 2022.

Concerning specifically, Surface Rental, the report shows that the company paid a total of US$1,072,281.39 as Surface Rental from 2019-2021. Of this amount, US$362,246 for 2021 was offset by US$19M through advancement payment MOU.

“The declared surface land rental of US$ 3, 679,820 in the AML self-Compliance Report is below the total unadjusted amount from 2005 to 2021 in the amount of US$5,214,431.80,” the report noted.

Arcelor Mittal-Liberia, according to the latest report, must account for the variance of US$ 478,656.09 despite providing some purported receipts, amounting to US$ 4,734,775.71 to the National Bureau of Concessions team.

“This is in line with Article 21 of Amendment 2007. Hence AML will be required to pay US$478,656.09 as unpaid surface rental fees to the government of Liberia,” the report added.

As for Royalty payments, the report said the company has exported Ore with a total value of US$875.77M at a royalty rate of 4.5%.

The payments have been backed by verified receipts reportedly issued by the Liberia Revenue Authority (LRA). According to the monitoring institutions, royalties for Quarter four of 2019 and Quarter one of 2022, were both offset from the US$19M advancement payment MOU.
Detailing the report, NBC observes that for Scientific Research Fund, during the period (2019-2021) a total of US$300,000 (US$100,000.00 per annual) was paid by AML, except for 2021 which was offset from the US$19M advancement payment MOU.

“AML has only paid US$1, 400,000.00 as reported in their October 2021 Compliance Report. This would be payment for 14 years @ US$100,000.00 per annual. Since AML has been operating for 16 years period, the full amount should be US$1,600,000.00,” the report stressed.
The report added: “AML is to pay a balance of US$300,000 for the Scientific Research Project.
Consequently; the company is required as per the MDA to pay US$300,000.00 to the Government of Liberia (GOL) through the Ministry of Mines and Energy.”
Interestingly, an MOU calling for the establishment of a Mining and Geology Institute at the Nimba County Community College between AML, UL, MOE and NCCC has been underfunded in terms of direct support from Arcelor Mittal Liberia.
The steel company was authorized to make a full payment of US$650,000.00 instead, according to the report, the company paid US$450,000.00 which can only account for payment for 13 years @ US$50,000.00 per annual.
However, findings revealed that AML has been operating for 16 years as such; the full amount to be paid is US$800,000.00.

“The balance amount to be paid for this section is US$150,000. Hence, the AML is required to pay the University of Liberia, or its designee, an amount of US$150,000.00”
At the same time, the company has paid an amount of US$1.7M towards foreign scholarship out of a required payment of US$3.1M based on the time of computation from when they started operation to present.
The report indicated that an outstanding payment of US$1,400,000.00 should have been paid towards foreign scholarships as per the MDA as such; it adds, ‘Arcelor Mittal Liberia is required to refund the Foreign Scholarship Program in the amount of 1, US400,000.00.
Meanwhile, as regard other payment to government, the report mentioned that Arcelor Mittal should have paid a total of US$5.8 Million for the period of 2005 to five years after the second amendment.
There are LRA payments receipts indicating the amount of US$5,088,459.00, however, there were no proofs of payment for the remaining difference of US$478,656.09.
“Hence, the NBC mandates that the AML US$478,656.09 should pay to the GOL for unpaid import duties as stipulated in the MDA.”
Among its many recommendations, the report called on the government of Liberia to commission a financial performance audit of AML from the beginning of operation in 2005 to 2021 to ensure that the company’s full compliance with provisions of the MDA; Varney Dukuly writes.

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